Bri

I did just think of this....What if a guy took a hardship withdrawal on 12-31-99....He wouldn't be eligible to defer in all of 2000 (unless he's got a 12-31-00 paycheck). Yet I know that he's still included in the ADP test for the year in that case. So I guess you would have to keep them in. oh well, just thinking out loud... --bri

Here's a completely theoretical question but thought-provoking.... Let's say a plan year just ended on 6-30-2000, and now the company is changing to a 12-31 year end, so there's a short plan year for the rest of 2000. We have an HCE who already deferred $10,500 in the first half of 2000. I would like to at least suggest that the participant is not eligible to participate in the 401(k) arrangement in the plan year, or the 401(m) match arrangement (assume no post-tax allowed.) I mean, it could be lousy not having a zero in your ADP test (not eligible to defer), but it may improve your coverage ratio for the 401(m) part of the plan. I doubt there's any code to back me up, but what do the experts say? --bri