FAQ 567: Compensation--Post-entry compensation is different for different sources of money


I have a plan which has date of entry for deferrals and safe harbor as the date following completion of 1 year of service and age 21. Then for employer discretionary and matching the entry dates are January 1 and July 1. Compensation prior to entry is excluded. How do I account for both of the different compensations?


In this scenario, you will need to use the override compensation fields on the Override Test Compensation (TESTCOMP) screen in the employees' records.
Typically the standard Compensation screen would include the:
"Plan" comp - full 12 months comp, excluding any excluded portion of comp (e.g. bonus)
"Excluded" comp - excluded comp pieces (e.g. bonus)
"Pre-Entry" comp - the portion of comp prior to the Deferral/Safe Harbor entry date
The system will then generate the post-entry Deferral/Safe Harbor comp on that screen when the valuation calculations are run.

The post-entry Match/Profit Sharing comp should be entered on the Override Test Compensation (TESTCOMP) screen in the "Employer Matching" and "Employer Profit Sharing" fields. It should also be entered in the "ACP Test" field if you want to use post-entry entry compensation in that test. Remember that the override comp fields can be entered for just those participants with a difference; it is not necessary to populate all fields for all employees.