What is the minimum gateway in a combo plan?

Hi

Looking into a proposal, all plans are calendar.

DC Plan already exists. Provisions are 401k+NESH+PS

Entry is first day of the month following completion 1 YOS

Compensation is defined as from DOP

CB plan will have 1 year wait, dual entry and full compensation

For all purposes, all top heavy.

DC plan top heavy provision states last day rule. PS states last day rule+1000 hours

EE data for DC plan:

• DOH 3/15/2021
• DOP 4/1/2022
• DOT 5/1/2022
• 2022 w-2 $12,000
• Salary from 4/1/2022 to 5/1/2022 - $3,000

From above, never eligible to enter CB plan so top heavy is only 3% and under DC plan only

Gateway is 7.5% (3% NESH+4.5% PS)

For gateway, $3,000 salary is used and thus $225.

Top heavy is based on full salary i.e. $12,000*3% = $360 however, plan has last day rule.

What amount is supposed to be allocated?

Thank you

I think you're on the right track with the $225.  No top heavy minimum from either plan is due.

But, this person's also a statutory exclusion.  If you run separate tests, they could get by possibly with only the 3% safe harbor on the 3,000.

Hi Bri

Thank you for the input. If this person worked 1000+ hours from 3/15/2021 to 4/1/2022 (sorry did not mention before), would not be statutory exclusion, correct?

Given the age, need in the testing i.e. cannot use as OEX, will never pass the test otherwise.

They can be - once they hit their year of service on 3/14/2022 they have six months to enter the plan so any DOP before 9/14/22 would be enough for you to be allowed to disaggregate them.  

But if you need them in the test, keep them in there at the 7.5% of 3,000

Agreed and thank you.

Make sure your document has the override provisions for gateway if you are giving them anything more than the 3% SH on DOP comp, otherwise you're violating last day rule.