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personally I think it smells. especially if the HCEs can put away the max. in effect, just looking at only the 6 people coming in, you have a 1 month plan year, which of course is forbidden for safe harbor. the exact reason safe harbors are supposed to be at least 3 months long to prevent HCEs from putting away a lot in a short period of time. this situation appears to be different than if the plan always had monthly entry dates. especially given the fact 25% of the new people are HCEs but then, remember I am a Grinch.

I think the house bill is at 25% and the senate at last review was 20%. Yeah it's bad for plan formation for the reasons mentioned; I have some plans on the fence because of it. (shrug - I try to react as an American and not a pension person.) I don't want to get too political but...well, the whole thing is utter nonsense, IMO. They want to get rid of the estate tax, which affects something like 3500 people per year. It's a windfall, and won't affect behavior. Ditto the pass-through income; it's a windfall and won't change business creation behavior; it will just change the way people organize their businesses. And the cynicism of throwing middle income people a bone and then having it go away after a few years is beyond disgusting. It's ballyhooed as tax "reform" but it's really just another tax cut. Has anyone noticed that we are in an expanding economy? I know it's not expanding as rapidly as everyone might like, but what are they going to do if/when the economy goes south? I know - a tax cut!! A tax cut is the answer to absolutely every problem. Now, I'll be one of the first to say that high taxes are indeed a drain on the economy, and maybe they are in fact too high. But they're not high enough to support the spending that we are doing! Have some b*lls and cut some spending.

No, unless it has a 401(k) Provision. Good Luck!

the opinion expressed by the IRS at the 2009 ASPPA Conference (#44 Q and A) (of course, the disclaimer applies that such opinions might not necessarily reflect the actual Treasury position) you might have missed this while you were collecting toys from the different booths. IRS response: There is no gateway requirement for a general tested plan under Treas. Reg. §1.410(b)-5(d)(5), unless cross-testing is used to determine the rate group testing. The gateway rules are in §1.401(a)(4)-8(b)(1)(I).