25A. Uniform Points Allocation Formula

Statement of Requirement: Reg. § 1.401(a)(4)-2(b)(3)(i)(A); Rev. Proc. 2023- 37, 2023-51 I.R.B. 1491, sec. 12.02(4)

Sample Adoption Agreement Language:

Each participant will receive _____ points for each:

(Must select at least age or service)

_____ year of age

_____ year of service

_____ (not to exceed $200) of Compensation

Each participant's allocation shall bear the same relationship to the employer contribution as his or her total points bears to all points awarded.

29 | D e f i n e d C o n t r i b u t i o n P l a n L R M P a c k a g e 0 1 / 2 0 2 4

(Note to reviewer: Pursuant to § 401(a)(27) of the Code, employer contributions to a profit-sharing plan are not limited to an employer's current or accumulated profits. However, the plan must designate whether it is a pension plan (such as a target benefit or money purchase plan) or a profit-sharing plan. The plan type must also be designated if the plan is a profit-sharing plan which contains a § 401(k) arrangement.)