Sponsor wants to establish age based ps plan to a closed group (to make up for freeze of a db plan). By itself, it would meet the designed based safe harbor.

1. Does this avoid the gateway even though not all employees are eligible? I think that the closed group need only satisfy 410(b) and then it would be exempt from the 3/1 or 5% rules.

2. Any opinions on whether or not "employees formerly eligible for the employer's pension plan" might meet the reasonable classification requirement that is a prerequisite to use of the average benefits test for coverage? Any experiences with the IRS on that point?

Age based and designed based safe harbor, somehow, these terms seems to contradict each other. How can you have a designed based SH age based allocation?

It should work.

Submit to be sure.

Thanks EF Hutton.

Jerome, I thought I had my IRS-speak down and could show it off but perhaps not.

Tom, da book needs a little work in this area but there is a good example kind of related.

Andy

well, I am suppose to come up with some more stuff to add to the book, so maybe I can figure out a way to add this one to the book.
just got the e-mail from ASPPA wanting me to give the safe harbor/cross test talk in Oct again. maybe 2 times. plus I have to modify it for the July presentation so the emphasis more on cross testing with a little on safe harbor.

oh well, I wasn't going to do anything the next few months anyway.

Don't forget the Flying Elvis parachute lessons.