Definition
Allocation method where allocations are made to participants as a percentage of compensation, with each participant receiving the same percentage or being charged the same percentage. For instance, if each employee receives 15% of eligible compensation as a contribution to the plan, contributions have been allocated on a pro-rata basis.
Referring Cite
Plan document
Additional Helpful Information
-
- Under Revenue Ruling 2004-10, a defined contribution plan under which the accounts of former employees are charged a pro rata share of the plan’s reasonable administrative expenses, but the accounts of current employees are not charged those expenses, fail to satisfy the requirements of § 411(a)(11) of the Internal
