Is SPD amendment required to notify Participants of cross tested alloc

[Guest LMalone]

For cross tested plans that only define allocation groups but do not specify percentages (which may change from year to year), is a Summary of Material Modification required each year, even though there is no corresponding plan amendment? How will each participant be notified of the percent allocated to his group?

[Richard Anderson]

A SMM is not required each year. The participant will know what was allocated to his group when he or she gets the annual (or quaterly or monthly, whichever is done) statement that shows the contribution to his or her account. I would think that most employers, once they have determined what the contribution will be, tell the employees what the contribution will be for that year.

In a discretionary PS plan (cross tested or not) there is no required notification of the percentage contribution, but most employers informally announce it to employees.

The total contribution to the plan is disclosed in the required annual Summary Annual Report.