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Good morning to all, We have a client, a medical practice, with one owner-doctor, 100%, and two non-owner doctors, along with some rank and file employees. The plan was set up to exclude "non-owner doctors" from eligibility to participate in the plan. All the doctors are HCEs. Now, the owner-doctor would like to make an offer of employment to a new non-owner doctor and he wants to make the plan available to just this new non-owner doctor but not the two non-owner doctors he already has. We were thinking about amending the plan to simply exclude the two existing non-owner doctors by name. As we have never done that before, we are not 100% comfortable doing it without asking the advice of the experts. Would you do it that way or is there another technique? As an aside, every year when the rate group testing is done for the new comparability profit sharing contribution, our software includes the two existing non-owner doctors in the test, even though they are not eligible to participate in the plan. We are not 100% comfortable with that, either, and would like to know if this is really right. The fact that they are HCEs and they do not get a contribution helps to pass the tests and that doesn't really seem "fair" but if it is permissible, we will continue to take advantage of it. Thank you in advance for your advice!

I’ve asked this question generically before, but was hoping I could lay out an example and get confirmation that this is correct: Plan has: Eligible HCEs: 10 Eligible NHCEs: 94 All 10 HCE’s are receiving a PS contribution Only 46 of the 94 are receiving a PS contribution (approx 49%). Plan fails the Ratio % Test for Coverage. That said, when I 410(b) test, ABT is 81%; and all rate groups under 401(a)(4) are above midpoint of 23.5. Plan now passes coverage testing. Is this correct?