How to use the new rate group solver to help you pass the general test for your DC plan.
This example is using a SHNEC NC DASH MAX plan and we will be solving for the NHCEs. DASH stands for Double Advantage Safe Harbor and combines two proposals together: a Profit Share New Comparability with a Safe Harbor Non Elective. MAX means that it gives maximum profit sharing to the people you choose to select.
Step 1: To utilize the rate group solver, ensure that your proposal is failing the general test by checking in the testing tab.
Step 2: View the full general test report at the bottom by clicking the button that says "IRC 401(a)(4) General Test (Rate Groups) Report..."
Step3: Make note of which HCE you need to use the rate group of for this solve.
Step 4: You can access the rate group solver by clicking on the "More..." dropdown at the top underneath the PlanGenPro logo.
Step 5: Before you can solve for the NHCEs you need to figure out how many NHCEs you need in the HCEs rate group. In the rate group solver, click into the "Participant Ratio" tab.
Step 6: Simply answer all of the questions and click the "Calculate Participant Ratio" button. Now you know how many NHCEs you need to get into the HCEs rate group.
Step 7: Go back into the report pdf and count that number of employees from the bottom up. Make note of their age.
Step 8: Go back into the rate group solver and click into the NHCE tab. Now answer those questions. Remember, the NHCE is the employee in which you counted up from the bottom and the HCE is still the one who's rate group you are solving for. Press "calculate" wen you are finished.
Step 9: The rate group solver tells you the rate at which all NHCEs need to be receiving total contributions. This number includes the 3% safe harbor contribution.
Step 10: Subtract 3 from the number it provides to you and that will be the rate you need to give to all of your NHCEs. In the video example our number was 18.265498 so we gave the NHCEs 15.265498.
Step 11: Save and recalculate and now your proposal should pass testing.