Last day rule for participants in "All others" group (and another question)

[BG5150]

We have the following groups:

Each HCE and/or physician in own group

Each member on management in own group

All other particpants

Plan is Safe Harbor and has last day rule for PS.

For the people who get SH and terminated, they must get the Gateway to get to cross testing. But since they are all in the "All other participants" group, do I have a problem because the people in that group will not be getting a uniform allocation? In this case, the allocation will be a little higher than the gateway minimum.

Second question: What if a manager becomes an HCE, and is therefore in 2 groups. Which do you use? Doesn't this formula fail the definitely determinable requirement?

[BG5150]

I realize in the above example, both the HCEs and Managers are in their own group. I was thinking, what if group 1 was HCEs and group 2 was managers.

[Mike Preston]

Did you mean "lower"?

*IF* the document doesn't have gateway language the effectively allows you to ignore the fact that there is only one formula in play for the all other participants group, then you simply have to put enough money into the all participants group to satisfy gateway. *IF*, as you say, you have allocation conditions that preclude both you will fail non-discrimination, initially. Then you use an -11(g) amendment to cure the failure.

[Doghouse]

In drafting the language for the groups, I always put something in about group membership being determined on a specific date, e.g. the first or last day of the PY.

[Tom Poje]

for instance, depending on the document, this is language in one FT William document (which is similar to the LRM language from the IRS

Participant is included in more than one group, the Participant's share of the contribution allocated to each group will be based upon either the amount of service or the Compensation for the part of the year the Participant was in the group.