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New Comparability/Cross-tested

Ascensus Consulting provides administration, compliance, and consultation services for new comparability plans. A new comparability plan is a profit sharing plan in which employees are divided into groups, with each group receiving an employer contribution that is a different percentage of compensation.

A new comparability plan could be an option for an employer that wishes to reward key employees while contributing a minimum amount for other employees. The employer sets up the plan to maximize contributions to the company owner(s), to reduce the cost of employee benefits, or to benefit key employees. Our services for new comparability plans include, among others:
  • New Comparability Plan Documents
  • New Comparability Plan Administration
  • New Comparability Plan Compliance Testing
  • New Comparability Plan Consultation
  • New Comparability Plan Multi-fund Open Architecture Daily Valuation and Recordkeeping
  • New Comparability Plan Form 5500
  • New Comparability Plan Design

Typical number of employees in the plan: Unlimited number of eligible employees

Features: In a new comparability plan, age and compensation are used to determine future benefits. Employer contributions, or allocations, are converted into equivalent benefits which must be non-discriminatory by meeting certain highly technical non-discrimination tests.  A new comparability plan can be combined with other retirement plans.

A new comparability feature can be added to a 401(k) plan to make the plan even better.  Just as with a 401(k) plan, a new comparability plan must comply with applicable Internal Revenue Code and the Department of Labor requirements of the Employee Retirement Income Security Act of 1974 (ERISA), which is the federal law that sets minimum standards for operating most voluntarily established tax qualified retirement plans to provide protection for individuals who participate in the plans.

Contact us for more information.