"I'm looking for a little confirmation on what I hope are easy questions -- with a lot of set-up.
A control group has 9 different 401(k) plans. A few of the plans fail the ratio% test so we're going to aggregate the plans into 3 separate groups:
Group 1: Plans 1, 2, 3, and 4 are not safe harbor and all have identical provisions.
Group 2: Plans 5, 6, and 7 are not safe harbor and all have identical provisions (but different match than group 1).
Group 3: Plans 8 and 9 are safe harbor match with identical provisions except Plan 9 also has a fixed 2% non-elective contribution.
Groups 1 and 2 each pass the ratio% test for 401(k), 401(m), and 401(a) as well as ADP and ACP so we are in the clear. Group 3 passes the ratio% test for 401(k) and 401(m), but not 401(a). The only option for Group 3 is the average benefits test and it passes --if our
system is running it properly. While I know the basics, I don't have a ton of experience dealing with the ABT and I'm always leery of results that I can't double-check with confidence. I know I should trust the software, but I trust the opinions of many of those who reply to this message board a little more.
In the average benefits test the HCE and NHCE in Group 3 are having the EAR's calculated while all HCE and NHCE from Groups 1 and 2 are shown with a 0.00 EAR. The average EAR for all HCE is .72%. The average EAR for all NHCE is .65% so definitely more than 70% of the HCE EAR. Non-discriminatory classification seems fine -- excluded employees are only those employees from companies 1-7 and the ratio% test for 401(a) was 52%.
With this information does it sound like our system is running this properly and all three groups pass coverage -- or is this not
enough information to hazard a guess?
I think we've aggregated the most-logical way possible but am I missing any potential problems with aggregating these 9 plans into 3 separate groups?
Each of these plans uses different recordkeepers, have different investment lineups, and very different fee structures. Is this a potential BRF problem?"