Say we have a combined defined benefit/profit sharing/401k plan.
The non discrimination tests are to be performed on the accrued to date basis.
Regarding the minimum gateway,is the highest allocation for the HCEs based on the allocation under the accrued to date method or is that always based on the annual (current year) method?
For example for a first year DB plan a 5% owner HCE (earning 100k) can have a DB benefit of $0 at the beginning of the year and an accrued benefit of $10,000 at the end of the year. And if he has 5 years of credited service at the end of the year his annual accrual is 10%, but his accrued to date accrual is 2% (10,000/5 divided by 100k) and thus the equivalent allocation differs greatly.