The allocation condition is that you must be actively employed on the last day of the valuation period.
An employee who is active on June 30 gets a June 30 allocation, but if they quit December 15, they do not get an additional allocation for the 6-month period ending December 31.
The plan uses a definition of compensation that passes 414(s). The plan uses a pro-rata allocation method for each 6-month allocation period based on compensation paid during that 6-month period.
Assume all 3 are true:
- some employees get no allocations for the June 30 period because they left before June 30, and
- some other employees get allocations only for their compensation paid through June 30th because they left before the end of the plan year but after June 30, and
- some other employees get allocations based on full year pay because they were active on December 31.