Eligibility Based on Compensation

[Just Me]

Can a DB plan base eligibility to participate on the employee exceeding a specified level of compensation? (The plan is aggregated with a DC plan and will pass coverage and nondiscrimination testing on an aggregated basis.)

[Tom Poje]

you didn't mention minimum participation (you can't aggregate plans to pass that test)

[John Feldt ERPA CPC QPA]

Tom's point about passing the 40% 401(a)(26) test for minimum participation is correct.

Perhaps before 1987(?) "Excess Only" plans existed?

[Doghouse]

Is there any issue with reasonable classification under 410(b)-4(b)?

[Just Me]

Plan satisfies 401(a)(26) and the reasonable classification test.

Other issues? Seems to not pass the "smell test" but that's not part of the Code or ERISA.

[GBurns]

Remember that just because you do not see it as "part of the Code or ERISA" does not make it so. That is only your opinion and none of us are correct all the time, heck, not even most of the time.

If it does not pass the "smell test" it means that further investigation is warranted.

Are you implying that the vast majority of these employees earn above that particular amount?

Are you saying that an "Income Level" can be a classification criteria?