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Doesn't the statute say "...in excess of..."?

Now since they know they can exclude a few, now they want to exclude more. They only want to cover about 1/2 the employees as they other 1/2 are not considered long term, are they until a project is finished after a few years. So they will meet the one year of service currently in the plan. But if no HCE's, no testing, no problem. I did tell them if one EE snuck into HCE because of some taxable income that isn't regular pay, it would blow all the testing.

This discussion has implications in another current thread. That other thread essentially asks the question: what is the participant's last day of employment? IMO, organizations that don't have robust HR capabilities are better served by using the 1,000 hour rule. As far as RBG's comment regarding cause for concern, I would say that is the very nicest way of wording it. If left to my own devices I would say that whoever suggested 2,080 hours would result in the crediting of two years of vesting service is dangerously incompetent and any organization that doesn't remove that person from client responsibilities is complicit.

Based on my experience this year, I think this is the safest approach. I had a participant this year who termed 12/30 and who wasn't allocated profit sharing based on the plan's last day rule. The client called to ask why, since 12/30 was the last "work day" of the year. They understood my explanation based on what they provided and the plan language, but ended up clarifying that 12/30 was reported as her termination date only because 12/31 fell on a Saturday, and that the participant was indeed still considered "employed" on 12/31 despite that not being a work day. It worked out fine, but from a client-happiness point of view I'll plan to ask first in the future!

Honestly, you probably just need to find a better person to talk to at the RK... This sounds like it is coming from someone who just does not understand plans