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Old 02-27-2018, 09:40 AM
Mark Cavazos Mark Cavazos is offline
Join Date: Sep 2004
Posts: 2,709
Default Cross testing plans with mid-year entrant

For a non-discrimination test, I am cross testing a CBP and a PSP. An NHCE enters the plan mid-year on 7/1. Under the CBP, the hypothetical allocation is based on the calendar year compensation. Under the PSP, the employer contribution is based on compensation while a plan participant. So, what was a 3% PSP contribution becomes a 1-1/2% contribution when the full year's earnings are used.

Am I missing something? Is there a way out?
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