Leaderboard

Also note that if you allow a specific employee to enter the plan early by naming them (or anything to that effect), you must pass coverage testing using the ratio percentage test as the plan does not satisfy the reasonable classification component of the average benefit test.

Just a note: if you accidentally let an NHCE in the plan early, EPCRS permits you to amend the plan retroactively to lower the eligibility requirements for that one person. So, there is precedent to permit the kind of amendment you are doing. I would beware, however, of situations where you have plans that are combined for testing, because you need to do coverage testing taking into account people who could have been eligible if they were in a permitted class and consider them to be excluded. So, the question becomes, if you let in a guy with a 6 month wait, and the plan normally has a 1 year wait, and you are doing coverage testing, do all the other employees (including NHCEs and HCEs) who have 6 months to 1 year of eligibility service become "nonparticipating"?