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Focus 11: Compensation: Allocation vs. Testing '14
Presentor: Derrin Watson Recorded Date: 6/9/2014 Duration: 60 Min.

This 3-part program was recorded during a live presentation on June 9, 2014 at 12:00PM EDT.

All sessions will be recorded and available for purchase. Due to the inability to track attendance, however, a Letter of Participation is not provided for recorded events.


Focused Topic 11: Compensation: Allocation vs. Testing
Mondays with Derrin and Steve

Whether testing a plan for nondiscrimination, designing a matching formula, or allocating a safe harbor 401(k) contribution, the compensation definition is crucial. The decision will affect both the cost of the plan and compliance testing. In addition to selecting the appropriate compensation definition, the practitioner must be familiar with the various adjustments that he/she can make to the compensation definition, as they can save the employer money and affect testing.

In this Web seminar, we explain the different compensation design options, alternatives for different types of contributions, alternatives for compliance testing, permissible adjustments to the compensation definitions, the plan economics of each choice, and definitions for different qualification rules.

Topics include:

  • Total compensation alternatives
  • Safe harbor nondiscriminatory definitions of compensation
    • Adjustments
  • Compensation options for testing
  • Compensation for each qualification requirement
    • 415, HCE, top-heavy, 401(a)(4), etc.
  • Options for safe harbor 401(k) plans
  • Effect of non-safe harbor definitions
    Prerequisites: There are no prerequisites and no advance preparation required for this program.

    Level: Intermediate

    Instructional Delivery Method
    Group – Internet-Based

    Speaker – S. Derrin Watson, J.D., APM
    Recipient of ASPPA's 2006 Educator of the Year Award

    Objectives: After the seminar, attendees should be able to:

    1. Distinguish between the different safe harbor compensation options
    2. Design a cost-effective contribution formula
    3. Select a correction method for a plan that has operated inconsistent with its terms
    4. Determine which definition applies for a particular qualification requirement
    5. Select an appropriate compensation definition for testing
    6. Determine which adjustments will produce better plan economics
    How To Participate
    You will need a phone (speakerphone, for multiple participants sharing the Primary registrant’s authorized connection) and Internet Access. The graphics presentation and illustrations will be viewed via the Primary registrant’s Web connection, while the speaker audio portion will be via the Primary registrant’s telephone.

    Select the "Fees" link on the right side menu of this page for more information about who is authorized to connect to the program, and for the cancellation/transfer policy.

    Program Schedule (Eastern Time)
    Monday, June 9, 2014
    12:00 noon to 1:00 p.m. Eastern Time
    (11:00 a.m. CT; 10:00 a.m. MT; 9:00 a.m. PT)

    Program related requests, questions, or concerns may be e-mailed to: