Gateway Cash Balance Average EAR use for non participants in CB Plan

[CharlesLeggette]

A TPA has asserted the following. A CB/DC combo plan that requires a 7.5% Gateway covers 6 of 10 ees in their CB plan and 10 of 10 in the PS plan and the average NHCE EAR is 2.5% in the CB plan. The ER PS contribution is 5%.  Question is do the employees who are not in the DB plan get to use the 2.5% avg EAR, or since they are not in the CB plan, they may only use the PS 5% and therefore must up the PS to a full 7.5%?

[Mike Preston]

Must up the PS to a full 7.5%.

[CuseFan]

Absolutely not - regulations are specific that you can use the average ENAR of the NHCEs benefiting in the CBP as the ENAR for each NHCE benefiting in the plan. The four who do not benefit in the CBP need additional 2.5% in PS to satisfy gateway.