Cash or Deferred Profit Sharing

[Chippy]

I'm trying to map a plan document for PPA. My current plan document has a cash or deferred profit sharing contribution where the participants can elect to either take in cash or defer up to 50% in to the plan. The document we are using does not have this as an option. I was told it's basically a bonus and that the plan has a special election for bonus and it would come under that.

The plan also has another employer contribution they call retirement contribution which is 5% of pay.

Would you agree that is is ok to not have the cash or deferred profit sharing mentioned in the plan document and to handle it like a special election on the bonus? It's on a volume submitter prototype format.

[jpod]

I always thought a cash or deferred feature was the opposite of salary reduction, i.e., the employer will put money in the plan unless the employee elects to take it as salary. What is the intent here? The way you have expressed it it doesn't sound like what I just described.

[Chippy]

The employer does put the money into the plan if the participant elects. It goes towards the deferral limits and is tested in the adp test and is deposited to the employee deferral source.

[QDROphile]

Treating the "profit sharing" as a bonus subject to a special deferral election is the correct way to look at it.