Skip to Main Content

Ronald Cluett Discusses Cross-Tested or New Comparability Plans

July 26, 2017, Plan Advisor

A cross-tested, or new comparability, plan is a type of profit-sharing plan that permits the sponsor to divide employees into different groups and project what a current contribution would amount to at retirement age, opening up the possibility of rewarding older employees with higher-dollar contributions, says Adam Pozek, a partner with DWC—The 401(k) Experts, a third-party plan administrator in St. Paul, New Mexico.

The structure works by taking into account benefit accrual rates, says Rob Massa, director of retirement at Ascende Wealth Advisers in Houston. “This takes age into account, enabling the contributions allocated to older employees to be larger than those made to younger employees” because the older employees have fewer years before retirement, Massa says.

These are the type of benefit accrual rates that are applied to defined benefit plans, says Ronald Cluett, of counsel at Caplin & Drysdale in Washington, D.C. “Cross-tested plans are the opposite of a safe harbor plan where the employer makes a uniform contribution for every participant,” Cluett says. “They are at the other end of the spectrum.”

To view the full article, please visit Plan Adviser’s website.

Excerpt taken from the article “New Comparability Plans Popular Among Small, Professional Companies” by Lee Barney for Plan Adviser.


About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022


This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2020 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Practice Area(s)