Cloudy Posted May 9, 2022 Posted May 9, 2022 Plan definition of compensation excludes reimbursements, etc. The only participants that have a reduced compensation for 2021 are both owners, so I don't think there is any problem in terms of 414(s). For the purpose of 401(a)(4) testing (on a benefits basis), do I have the option of using total compensation as testing comp? In this circumstance that would create an advantage since it's only 2 HCE's that have plan comp less than total comp.
CuseFan Posted May 9, 2022 Posted May 9, 2022 Yes. Luke Bailey 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
401kology Posted May 10, 2022 Posted May 10, 2022 Yes, the difference is between the compensation used for allocation purposes and the compensation used for testing purposes and those do not need to be the same. Luke Bailey 1
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