Common use of Minimum Allocation Gateway Clause in Contracts

Minimum Allocation Gateway. Any allocation of Contributions under either the Participant Group Allocation Method or the Age Weighted Allocation Method must satisfy the minimum allocation gateway. Each eligible Non-Highly Compensated Employee has an allocation rate that is equal to the lesser of five percent (5%) of the Employee’s Compensation (as defined in paragraph 1.16), or one-third of the allocation rate of the Highly Compensated Employee with the highest allocation rate. An allocation rate is the amount of Contributions allocated to an Employee for a year, expressed as a percentage of Compensation. The allocation rate for each group of Highly Compensated Employees will be as stated in an addendum to the Adoption Agreement.