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Plus the fact that an example was in the proposed regs (which I did not know) and then removed with no explicit explanation and/or prohibition is a tacit confirmation that we (me and TP and Bird) are on the correct side of the line.
We certainly have precedent for your taking comfort in this position. But I wonder if that comfort is misplaced? Historically, the 1992 401(a)(4) regulations were chock full of examples that didn't make it into the final 401(a)(4) regulations. The IRS made it clear back then that removing the examples in no way disenfranchised them. We have therefore taken great advantage of those examples even though they were removed, for precisely the reason you mention: they were not referenced in the final regulations as being removed because they were in some way misguided. However, that was a special case. The IRS admitted that they pulled those examples just so they could shorten the 600 pages down to a more manageable 300 or so pages. This was done to make it look like they were simplifying things in response to the cacophonous (there's that word again) cries from Congress that the new regulations were "too complicated because, for heaven's sake, they are (now everybody raise their voice with me, please) 600 PAGES LONG". The IRS made no bones about the fact that the reduction to 300 pages was a political ploy that got Congress off their collective backs.

No such similarity exists today for the 414(v) regulations, so I wonder if pulling that example didn't indicate that the IRS has indeed "rethunk" their position.

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I think the rule Mike was recalling is part of the definition of catch-up eligible in 1.414(v)-1(a)(4). One part of the definition is that the employee is “eligible to make elective deferrals during the plan year under an applicable employer plan (without regard to section 414(v) or this section); and …”

If you set the deferral limit to 0% for HCE’s and disregard catch-ups, how would they be considered as being eligible to defer? They have to meet the definition of catch-up eligible before they can make catch-up contributions.

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