Qualification requirements must be passed on an ongoing basis. Assume the following information is provided about...
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Qualification requirements must be passed on an ongoing basis. Assume the following information is provided about employees covered under an employer's qualified defined contribution plan. Employees Nonexcludable NHC 250 HC 30 Total 280 a. ● Which of the three qualification tests does this plan pass (if any)? General Safe Harbor Test ● Ratio Percentage Test Covered 160 25 185 ● Average Benefits Test % Covered Avg Benefit % 8.0% 12.0% b. Based on your answer(s) above, would this plan maintain its qualified status? Explain. Qualification requirements must be passed on an ongoing basis. Assume the following information is provided about employees covered under an employer's qualified defined contribution plan. Employees Nonexcludable NHC 250 HC 30 Total 280 a. ● Which of the three qualification tests does this plan pass (if any)? General Safe Harbor Test ● Ratio Percentage Test Covered 160 25 185 ● Average Benefits Test % Covered Avg Benefit % 8.0% 12.0% b. Based on your answer(s) above, would this plan maintain its qualified status? Explain.
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a The plan passes the General Safe Harbor Test and the Ratio Percentage Test but fails the Average B... View the full answer
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