ERISA 403(b) plan - general test for coverage

[Belgarath]

Employer match is only employer contribution, and it has a 1000 hr/last day requirement. Plan fails coverage (at 69% - grrr!). It's probably going to fail ACP as well, but that's a separate issue.

So if using the average benefits test for coverage, you do NOT include elective deferrals as per 1.403(b)-5(a)(2). Agree?

Now, assuming it still fails on an allocations basis, the coverage testing can be done by cross testing. As I read it, the same applies even if cross testing - you don't include deferrals. Agree?

Imputed disparity won't help, I don't, think, as there is only one HC, who still falls just below the taxable wage base.

Am I missing anything? Other thoughts? Thanks!

[BG5150]

Can they do an 11-g amendment to some people in to get it over 70%?

[Belgarath]

Nope, they are way past the allowable timeframe for an 11(g) amendment. This was brought to us a couple of months ago, and they have issues going back to 2009 (no 5500's or required plan audits ever done, no ACP testing, etc...) Coverage passes fine at 70% for all years EXCEPT 2013.

[Tom Poje]

that is my understanding, you would not include deferrals in the avg ben pct test.

of course, I guess you could test using a comp definition that excludes deferrals, but I hadn't thought about that before....