Rate group testing

[Belgarath]

Having a brain cramp. Plan is rate group testing on an allocations basis. 2 HC's - wife makes all the money, and wants to max out. (cross testing doesn't work, 'cause owners are way younger than all the employees - only 4 employees anyway...) The husband takes a nominal salary, defers the max, but is excluded from all other employer contributions.

When performing the Average Benefits Percentage Test,  do his deferrals get added back in? Common sense says no, but as I said, brain cramp. Thanks.

[Tom Poje]

let's change the conditions a little.

I have a controlled group. one plan has deferrals only, and only the husband is in it.

when you run the avg ben pct test, you would count all contributions from all plans, wouldn't you?

so the fact you only have 1 plan and he isn't eligible for other contributions shouldn't make a difference.

Now, if he never worked 1000 hours you could test of course test him as otherwise excludable.

.....

the Grinch loves it. defer the max on nominal salary. that will do wonders for the e-bar for the avg ben pct test. and young.

[Belgarath]

Thank you. The fog has cleared, and the cramp has disappeared. Help yourself to some Who Hash and some rare Who Roast Beast, and put it on my tab.

[Tom Poje]

 

don't mind if I do.