Regarding highly compensated employees - two situations. First, in the first plan year of a 401(k) plan established in a newly-formed company, and assuming there are no 5% owners, is it correct that there would be no HCE's for testing purposes in the initial year?
Changing the facts slightly, assume the newly formed company is actually a newly formed spun-off company which is not in common control with the former parent corp. Again, assuming no 5% owners, it is correct that there would be no HCE's during the initial testing year?