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404 Deduction - Eligible Compensation with per-payroll match and a Profit Share with last day rule


legort69

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Plan funds a fixed match each pay period and also has last-day rule for profit share. 

A participant terminates before year end.  

1) Are Participant wages included in eligible 404 compensation with respect to the deduction limit test?  And would it matter if they actually fund the profit share?

2) If a plan does not have a last-day rule on the match in the AA, and does not fund a discretionary match, but they have a last-day rule only on profit share, would this participant compensation be in the test?

 

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Sounds like he's not benefiting, which would mean he's not in the compensation total for the deduction calculation.

Of course if they're not funding profit sharing the deduction maximum might be moot (barring some astronomical match formula or a DB/DC combo)

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