414(s) compensation in determining EBARs

[Guest John Nelson]

Just checking: Can we use a 414(s) definition of compensation in calculating a participant's EBAR, or do we have to use a 415©(3) definition? What I'm really looking at here, of course, is limiting compensation to that which is earned during plan year while a plan participant. (I know that for top-heavy minimum, I still have to count plan year compensation (415©(3) definition).) The proposed new comparability regs got me thinking about this. As I understand the regs, we can use a 414(s) definition for the "1/3" gateway, but have to use the 415©(3) definition for the "5%" gateway.

Thanks.

[Guest]

I don't think it's a matter of 'can we use 414(s) comp' but rather 'you will use 414(s) comp'

see 1.401(a)(4)-3(e)Compensation rules

3(e)(2)Average annual Compensation

3(e)(i) general rule -...(use) 414(s) compensation

3(e)(2)(ii) certain modifications to average annual compensation ...'plan year compenstion may be substituted for average annual compensation'

note it says 'plan year comp', and therefore if comp definiton is date of participation, that is what you use. a good document will specify the definition, e.g. I know Corbel's documents state '414(s) comp = ....'