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Posted

If the employer chose to stop their discretionary match mid year, would the compensation for determining ACP testing also only be for the period of time the match occurred during the year or is full Plan Year compensation always used?  

I seem to be having the hardest time being able to confirm this.  

Posted

Compensation for the ACP test must be 414(s) compensation. If you are using anything other than a safe harbor definition of compensation, such definition has to be reasonable, and it has to satisfy the compensation ratio test. I have no idea whether a definition that excludes all pay after a given date would be considered "reasonable."

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Posted
3 hours ago, ERISAGal said:

If the employer chose to stop their discretionary match mid year, would the compensation for determining ACP testing also only be for the period of time the match occurred during the year or is full Plan Year compensation always used?  

I seem to be having the hardest time being able to confirm this.  

You can't confirm it because you are looking for something that is not there.  The numbers are done for the plan year; doesn't matter when the discretionary match was made.  

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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