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Finance and Financial Management

1995

Cross-testing

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Cross-Tested Defined Contribution Plans, Ho Kuen Ng Jan 1995

Cross-Tested Defined Contribution Plans, Ho Kuen Ng

Journal of Actuarial Practice (1993-2006)

Cross-tested plans are defined contribution plans that test allocations for nondiscrimination. The test is based on a plan's actuarial equivalent annuity benefits. Cross-tested plans have become popular among small plan sponsors after the release of the nondiscrimination regulations. This paper investigates the pros and cons of cross-testing.

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