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Interesting question, I think.  (Maybe not!)

In determining HCE status, Employer does NOT make the top-paid group election for its five 401(a) plans.  It is desirable for coverage testing that it not make that election.

Does the "consistency" requirement of the top-paid group election rules mean that the Employer cannot make the election for any of its non-401(a) plans where HCE status is relevant?  In this case it is for a 129 plan. 

  

 

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I think you are stuck. See 1.414(q)-1, Q/A-9(b)(2)(iii) - I note that it says for "all" employee benefit plans.

 

Q-9: How is the top-paid group determined?

A-9: (a) [Reserved]. See § 1.414(q)-1T, Q&A-9(a) for further guidance.

(b)Number of employees in the top-paid group -

(1)Exclusions. The number of employees who are in the top-paid group for a year is equal to 20 percent of the total number of active employees of the employer for such year. However, solely for purposes of determining the total number of active employees in the top-paid group for a year, the employees described in § 1.414(q)-1T, A-9(b)(1) (i), (ii) and (iii)(B) are disregarded. Paragraph (g) of this A-9 provides rules for determining those employees who are excluded for purposes of applying section 414(r)(2)(A), relating to the 50-employee requirement applicable to a qualified separate line of business.

(i)-(iii) [Reserved]. See § 1.414(q)-1T, Q&A-9(b)(1) (i) through (iii) for further guidance.

(2)Alternative exclusion provisions - (i)-(ii) [Reserved]. See § 1.414(q)-1T, Q&A-9(b)(2) (i) and (ii) for further guidance.

(iii)Method of election. The elections in this paragraph (b)(2) must be provided for in all plans of the employer and must be uniform and consistent with respect to all situations in which the section 414(q) definition is applicable to the employer. Thus, with respect to all plan years beginning in the same calendar year, the employer must apply the test uniformly for purposes of determining its top-paid group with respect to all its qualified plans and employee benefit plans. If either election is changed during the determination year, no recalculation of the look-back year based on the new election is required, provided the change in election does not result in discrimination in operation.

Edited for a typo...

 

 

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