We are considering several changes to our plan design and would like to know if anyone has gotten a determination letter on a 401(k) plan document that included a bottom-up QNEC. Anyone have trouble getting a determination letter for a plan with this feature?

Thanks.
PAL

I have received such favorable determintion letters, but not since EGTRRA was signed into law. It's a statement in the legislative history of EGTRRA that is making many consider whether bottom-up QNECs are still lawful. (My opinion is yes, still lawful until we hear otherwise from the IRS.)

Don't leave us hanging: what was the statement in EGTRRA's history that leads some to question the long-term viability of bottom-up QNECs?

The Conference Agreement for section 632 of EGTRRA, which raised the 415 limit from 25% to 100%, includes this statement:

"With respect to the increase in the defined contribution plan limit, the conferees intend that the Secretary of the Treasury will use the Secretary's existing authority to address situations where qualified nonelective contributions are targeted to certain participants with lower compensation in order to increase the average deferral percentage of nonhighly compensated employees."