Cynchbeast Posted May 22, 2015 Share Posted May 22, 2015 Plan is currently a (New Comp) PS/401(k) plan with no exclusions. Sponsor wants to amend to exclude one class of employees effective 01/01/16. What happens to an NHCE who is currently a participant in the plan and becomes a member of the excluded class on 01/01/16? Link to comment Share on other sites More sharing options...
Lou S. Posted May 22, 2015 Share Posted May 22, 2015 They would no longer be an active participant in the plan. They would continue to accrue vesting service. It is very similar to when a plan excluded collectively bargined employees and a previously eligible employee goes from being non-union to union. Except in this case for coverage you would probably have them as a non benefiting employee for certain tests where collectively bargined employees can generally be ignored. Link to comment Share on other sites More sharing options...
ESOP Guy Posted May 22, 2015 Share Posted May 22, 2015 the other thing to remember is this person would still be in the coverage test as includable but not benefiting. That may be obvious but thought I would add that. Link to comment Share on other sites More sharing options...
Doghouse Posted May 22, 2015 Share Posted May 22, 2015 Must such an individual receive any top heavy minimum? Link to comment Share on other sites More sharing options...
Bill Presson Posted May 22, 2015 Share Posted May 22, 2015 Must such an individual receive any top heavy minimum? No. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
Cynchbeast Posted May 26, 2015 Author Share Posted May 26, 2015 Thank you all; that answers my questions re PS contributions. Can I infer from this that this newly excluded NHCE (who is already a 401k participant) may be prevented from further deferrals? If not, he would be getting a 3% SH NEC; which I assume would necessitate including him in PS for an additional 2% in order to pass the gateway minimum allocation. Link to comment Share on other sites More sharing options...
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