Top Paid Group Election

[k man]

I have three questions concerning the top paid group election:

1) In the case of an employer with more than one plan, must the employer use the top paid group election for both plans?

2) Does the employer use the totals of employees participating in both plans combined when determining who is in the top 20%? In this case, no one who participates in plan A is a participant in Plan B and vice versa.

3) For the employees with less than 6 months of service, is that 6 months of service for the lookback year or total service?

I would appreciate assistance on any one of these points.

[Guest]

you combine everything, rank the employees, then take the 20%. ouch. that could effect coverage testing.

yes, both plan are suppose to make that election.

If only one plan indicates such an election, I guess its time for an amendment. I am not sure which plan overrides.

If so desired, you can ignore the 6 month rule, age requirement, etc. and count all bodies.

The 6 months would not carry over to the current year. just look at last years data and do your count. remember the 6 months only refers to those ees who regulary work less than 6 months. don't forget you can exclude those ees who work less than 17 1/2 hours per week on the avg either.

[k man]

tom, can you clarrify the 6 month rule? is that total service or service during the current year? the regs seem to indicate you count the current year and the prior years service, if any,

[Guest quinn the car fixer]

not sure about other software programs, but relius does not exclude an ee with more than 6 months of service but who term'ed in the determination yr before june 30. [ ee hired in 2000 and who term'ed 2/1/02 is in the count for the 2003 yr. ] sal's book only says 6 months of service before the plan yr end, not 6 months of service within the plan yr.

[Tom Poje]

the regs clarify it 1.414(q)-1T, A-9(b)(A):

...an employee's service in the immediate preceeding year is added to service in the current year in determining whether the exclusion is applicable...

so pretty much if you were full time you will get counted even if you quit Jan 1

(guess I never knew that was the exact wording, I simply assumed the 6 month rule applied to new hires. net effect appears to be pretty much the same)

[Alf]

Anyone have any ideas about correcting the differning elections with multiple plans problem? There is some type of consistency election requiremenet and I want to know if anyone has thought through correction of a violation.