Minimum allocation in money purchase plan

[dmb]

We have a money purchase plan with two allocation groups.  It satisfies the minimum allocation gateway.  There is a non-standard definition of compensation which leads to my question which is, can a money purchase plan include a minimum allocation?  For example, if the two allocations for the two groups are 7.5% of eligible comp and 5% of eligible comp, can the plan also provide that regardless of above no participant shall receive less than 2.5% of total comp?  Thanks.

[CuseFan]

Sure, why not?

[david rigby]

(1)  Is your proposal non-discriminatory? 

(2)  On the surface, it appears to favor NHCEs, so it should have no problems.  But, check the details with an eye on (1).

[dmb]

Thanks.

I guess our issue is would that be a non-definitely determinable benefit from a money purchase perspective?  

[Luke Bailey]

If you include it in the plan document at a particular rate, with no discretion, it's definitely determinable.

[CuseFan]

Exactly - it clearly defines the contribution amount/percentage to which everyone is entitled. Regarding nondiscrimination, you may need to test, but that doesn't change the contribution allocation obligation because it's a MPPP, and any failure would need to be addressed via 11g amendment (or plan failsafe provision) and NHCE increase.