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This part says they can determine the profit sharing contribution separately for each person. The allocation must pass discrimination testing. But, the rules are designed to prevent discrimination in favor of HCEs. There is nothing in the rules that prevents discrimination against HCEs. So, yes, they can decide that you do not get a profit sharing contribution for 2017 and still give it to other HCEs.

The only reg I can think of that addresses work-study students is the 403(b) reg listing of special types of excludible employees, see 1.403(b)-5(b)(4)(ii)(D). If the sponsor wants them excluded from the plan, I would suggest the plan be amended to specifically exclude them.

I agree with you - it’s a no from my understanding. It’s a terrible result for those tipped employees making less than minimum wage. I’ve heard of pulling amount out of wages pre-tax and any difference paid by check. Not ideal, but better than all being paid by check. I’m assuming they are only covering those FTEs they are required to cover, correct? So, they could raise wages to cover premiums, but assume that would not happen.

It is pretty simple for the company to exclude 'some' HCEs by having a cross tested formula that has everyone in their own rate group and then just have a resolution saying which HCEs are getting a 3% PS contribution. I'm pretty sure that will always pass testing since 100% of the eligible NHCEs are getting a 3% safe-harbor non elective so you'll always pass the ratio percentage test at 100% or more. I'm guessing the plan is drafted correctly, but that could be a bad assumption on my part. That is to say bobbyM35 the company probably can get away without giving you any additional contribution but as others have suggested getting a copy of the safe harbor notice would be a good start.

For what it worth from Gray Book 2004-42: Treas. Reg. §1.401(a)(9)-2, A-2(a) provides that except in the case of a 5%-owner, the “required beginning date” is April 1 of the calendar year following the later of the calendar year in which the employee attains age 70-1/2 or the calendar year in which the employee retires from employment with the employer maintaining the plan. If December 31, 2003 is the employee’s last day at work, and the last day for which he is paid or entitled to payment of wages, is that the date of “retirement”. Or is January 1, 2004, the first day he is not employed, the retirement date? When is the employee’s required beginning date? RESPONSE “Retirement” is the last day worked, not the definition of retirement date in the plan. What date is an employee’s last day worked is a facts and circumstances determination. The facts and circumstances are based on the employer’s practice concerning the last day an individual is considered an employee.