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Posted

I have a small PS plan with an integrated formula where the owner just wants to receive the same percentage allocation as his employees and forego the excess piece of the formula. I thought he could simply set the excess percentage to be 0%, but I'm not finding anything that specifically says he can do that (admittedly, just a 10-minute google search). Everything I find says that the excess percentage is the lesser of the base percentage or the maximum disparity percentage, without specific exceptions to be lower than that.

Any cites or insights will be greatly appreciated.

Posted

if your document has an integrated formula you should follow the terms of the document

if he wants the same percentage going forward, amend it to pro-rata allocation

Posted

otherwise how would you handle it from year to year?

oh, this year I want 5.7% in excess

next I want 0%

maybe 3%

you simply can't do that with the integrated formula.

now, if the document specifies the integration is a 4 step formula, then yes, everyone could get 3% step 1 and you could stop there, but I don't see how you can otherwise get around the document formula.

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