Quick Gateway Question - DB/DC Combo Plan

[metsfan026]

Good afternoon.  I think this is a silly question, but I just wanted to make sure I'm not overthinking it.

I know the Gateway for a Cash Balance/DC Combo Plan is 7.5%.

An employer can give more than that, correct?  The owner actually isn't taking a Profit Sharing contribution for himself.  He'd like to give the employees a little bit extra (about 10% into the Profit Sharing).  I just wanted to make sure that wouldn't cause an issue (I don't think so, since he's being more generous, but maybe I'm overthinking it).

[CuseFan]

No issue. The gateway for a combo could range from 5% to 7.5% depending on the highest HCE rate, and that gateway minimum is simply the cost required to enable cross-testing of the DC component.

[Jakyasar]

Gateway is not always 7.5%, it could be less.

Having said that, as long as there is room for additional deduction, of course. However allocation for additional amounts will depend on how the plan formula is written under PS portion.

[metsfan026]

2 minutes ago, CuseFan said:

No issue. The gateway for a combo could range from 5% to 7.5% depending on the highest HCE rate, and that gateway minimum is simply the cost required to enable cross-testing of the DC component.

Perfect, thanks!  Didn't think being more generous would be a problem, but then I started overthinking it.

[401kAllTheWay]

7.5% is very generous and typically that is the number I have heard. 
 

the other complicated way if you are worried about testing,  you could setup a “split plan design” to maximize your CB contributions.
 

For the sake of your own sanity, fight as hard as you can for 7.5%.

[DBnme]

https://www.milliman.com/en/insight/nondiscrimination-testing-minimum-allocation-gateway