For plan year beginning 01/01/2002 seperate testing will be used for 401(B) and 401(a)(4) for those not meeting a YOS.

The disaggregated group is comprised of only NHCEs and therefore passes 410(B) and 401(a)(4). The non-disaggregated group consists of only HCEs and therefore passes.

Is the disaggregated group subject to the Gateway? Is the Gateway applied before or after disaggregation?

The employer would like to give the NHCEs only 3% TH minimum for the 2002 plan year.

Hi, Richard.

The way I read the preamble to the new regs, you do not have to provide the gateway to those that can be disaggregated under 410(B). Note that this does not extend to restructuring. Here is the language from the preamble:

"The general rules and regulatory definitions applicable under section 410(B) apply also for purposes of these regulations. For example, these regulations do not change the general rule prohibiting aggregation of a 401(k) plan or 401(m) plan with a plan providing nonelective contributions. Accordingly, matching contributions are not taken into account for purposes of the gateway. Similarly, pursuant to section 1.410(B)-6(B)(3), if a plan benefits employees who have not met the minimum age and service requirements of section 410(a)(1), the plan may be treated as two separate plans, one for those otherwise excludable employees and one for the other employees benefitting under the plan. Thus, if the plan is treated as two separate plans in this manner, cross-testing the portion of the plan benefitting the nonexcludable employees will not result in minimum required allocations under the gateway for the employees who have not met the section 410(a)(1) minimum age and service requirements. "

Hello Mike!
great to see you on Benefits Link!

guess I can retire from trying to answer questions and let an expert take over!
go Wolves!

Thanks, Tom. I don't think I'll ever have the time that you put into this board, so please don't go retiring on my account!