How would the 3/1 "gateway" apply to a super-integrated plan

[AndyH]

Gateway for "super-integrated plans"? Any thoughts on how this would work in 2002 for a plan with a contribution of less than 5%? Just make sure no HCE gets more than 3 times any NHCE?

Example, employer contribution is allocated proportionate to 3% plus 10% over $50,000?

[Guest]

formula is 3% + 10% >50000

hce makes 170,000, so contribution is

3%(170,000) + 10% (120000) = 5100 + 12000 = 17100.

this is 17100 / 170000 = 10.06%

so NHCEs must get 3.353% of pay.(1/3 of 10.06)

it could be more complicated with mid year entry dates, and allocation based on comp from date of entry. my reading of the proposed regs says ee would get:

3.353 of midyear comp or 5% of 415 comp! If plan was top heavy would get a minimum of 3% of 415 comp. fun stuff, huh?

[AndyH]

Thanks for the comments, Tom. That's the way I see it as well. It'll be interesting to see how this would be put in a document!

I talked to a couple of actuaries after the ASPA Cross tested session. They were shaking their heads and saying how this was more complicated than DB work.

Those of us who have done some of this have a big advantage over those who don't understand the concepts. It would be tough starting from square one.

[Guest]

actually, I thought the proposed regs were fairly clear, but then I am a nut case. I thought the cross tested session could have been done better. We need something on a real beginers level, and i think it can be done. oh well, I will have to write something up on my own. actually I have already started.

It will be interesting to see how the software will handle. we still have a year, guess we'll see if something gets done by then.

sorry I missed you. ran into a couple of other benefit links users. guess that makes you the 'missing' link user.

[AndyH]

Let me know if you want some help with your publication.

the missing link

[Guest]

send me an e-mail, and I will send you what I have put together for our Q & A column next month. I appreciate any comments.

Joan Gucciardi will be having an article in the Journal of Pension Benefits shortly.