In determing the total number of rate groups using a prototype document with the IRS LRM language in it, what is an eligible HCE or nHCE? Eligible for plan, to make deferrals or to receive a profit sharing contributions? And when is this determination made? It would make sense that it is eligible to receive a PS contribution since it is not capitalized and that this decision would be made at the end of the plan year.

If a plan that has an HCE leave before meeting the hours requriement for profit sharing contribution but is still eligible to make deferrals and get match, can they end up loosing a rate group?

Thanks for any help

LRM#94 contains the following language

Each eligible NHCE must have an allocation rate (defined above) that is not less than
the lesser of 5%, or one-third of the allocation rate of the HCE with the highest
allocation rate.

now, if I have an employee who is eligible to defer, but quits and the plan has a last day rule for nonelective contributions, then the nondiscrimination regs cleary indicate the indivudal is not required to receive the gateway.

At the minimum I would conclude to be consistent, by 'eligible' the LRM means eligible to receive the nonelective contribution.