Irregular pay?

[doombuggy]

Would you consider commissions to be classified as irregular pay?  If so, why?

We use Relius documents and bonus is listed as irregular pay.  Client I have has a plan doc that states deferrals come out of irregular pay unless the participant elects otherwise.  This plan also has commissions.  Plan sponsor did not withhold deferrals from either bonus or commissions.  I realize that this is part of the administrative procedures, but we want to make some things clear to the client so they know how to handle this properly going forward.

Thanks!

[Belgarath]

I suppose it might make a difference if the commissions are for a commissioned salesperson, where ALL of their comp is based on commissions, or if it is an occasional thing. I don't think there is a hard and fast rule - just facts and circumstances.

But under your description above, if commissions are not excluded under the compensation definition of the AA, then the client has to include them regardless. In other words, if they aren't excluded under the normal definition in the AA, and the Administrative Procedures section says that irregular pay is used for deferral purposes UNLESS the participant makes a special election, and the participant hasn't made such a special election, then the fact that the comp might be "irregular" is immaterial.