Common use of Maximum annual allocation Clause in Contracts

Maximum annual allocation. Effective January 1, 1997, the actual deferral percentage for eligible highly compensated employees for the Plan year bears a relationship to the actual deferral percentage for all other eligible employees for the preceding Plan year which meets either of the following tests: 1. The actual deferral percentage for the highly compensated participant group shall not be more than the actual deferral percentage of the nonhighly compensated participant group multiplied by 1.25, or 2. The excess of the actual deferral percentage for the highly compensated participant group over the actual deferral percentage for the nonhighly compensated participant group shall not be more than two (2) percentage points or such lesser amount determined pursuant to regulations to prevent the multiple use of this alternative limitation with respect to any highly compensated participant. Additionally, the actual deferral percentage for the highly compensated participant group shall not exceed the actual deferral per-centage for the nonhighly compensated participant group multipled by two (2).