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410b Test and Disaggregating Otherwise Excludable EEs


RDY2RTR
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Plan has immediate entry for employee deferrals, but requires 1 YOS for the employer match.

When I run the 410b test in Reilus Administration without dissagregating otherwise excludable employees the number of non-excludable NHCEs and HCEs are correct.

When I run the 410b test, choosing to disaggrate otherwise excludable employees, the number tested in the otherwise excludable group for the employer match is including employees who never met the eligibility requirements for the match portion of the plan (however they have a plan entry date due to employee deferral eligibility). Not only this, the test says they are benefitting under the match. I would expect to see the nonexcludable population from the first test I ran (w/o dissaggregating) to be split into two pieces when I disaggregate. It should be easy to check the numbers: sum of nonexcludables for 410b purposes not excludable by statute + nonexcludables for 410b purposes excludable by statute should equal the total nonexcludables from the first test, correct?

Do other users out there have the same problem? What is your workaround?

Also, if anyone can tell me what Relius' logic is in determining whether an employee is non-excludalbe and benefitting (what fields should I be looking in to trouble shoot), I would appreciate it.

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if someone is eligible to receive a match (doesn't matter whether they defer) they are includable and benefiting for the 401(m) portion.

if by chance you have an after tax account that still accepts contribution they are includable and benefiting regardless of hours or last day provision for the match

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