Comp exclusions in a match a BRF issue?

[austin3515]

IF a plan document excludes overtime for example from the match calculation, does that present a Benefits rights and features issue?  How would that test even work?  People with no over time are treated as benefitting the same as HCE's?  My brain starts to melt down.

I would hav thought that if I passed testing based on a 414s definition of comp I was ok.  I have never heard of this before in 20 years...  

[John Feldt ERPA CPC QPA]

Does the definition of compensation used for allocating the match satisfy 414(s)?  If it does, then my understanding is that you have no BRF issue.

If it does not satisfy 414(s), then you can’t test ACP under that definition. And when you look at the rates of match using a definition of compensation that passes 414(s), you will notice that you have differing rates of match for the deferrals that were made. 

[MWeddell]

I believe that you don't have a BRF issue even if the definition of compensation used to determine matching contributions does not satisfy Code Section 414(s).  This is consistent with the ERISA Outline Book, Chapter 11, Section XII, Part E, Section 3, last sentence 

Unfortunately, the regulation is somewhat ambiguous.  Compare Treas. Reg. §1.401(a)(4)-4(e)(3)(iii)(D) and (F) (for which the regulations expressly state that the plan's definition of compensation need not satisfy 414(s)) and (G) (which is silent on the matter).

[John Feldt ERPA CPC QPA]

I should go back and edit "will find" to "may find" in my prior post above. I agree that what you describe is usually the case. However, take a look at the same section in the EOB, 3.c.2 through 3.c.4 when the definition for compensation for matchable deferrals and the matching allocation cap are not the same. Had a case like a few years back.

[MWeddell]

Thanks, John.  Example 3.c.4 in that portion of the ERISA Outline Book has an example where there may be a discriminatory BRF available match rate.  It strikes me as an unusual set of facts, but certainly worth mentioning.