Statutory Employees

[Guest Giovanni]

Do Statutory Employees have to be included in a 401(k) plan?

[BFree]

If you mean those employees who can be excluded by statute (those with less than 1 year of service or who have not attained age 21), the answer is "No." This assumes you are creating the plan. If the plan is in existence, the answer is to read the document. If by in the plan you mean "in the ADP/ACP tests," the answer is "No."

[Tom Poje]

I will assume your plan has immediate eligibility to defer.

Therefore, you have the following possibilities:

1. Include all on one test

2. Perform 2 tests - one consisting of all hces and only those nhces who completed 1 yr svc and are age 21. the other test consists of only nhces (otherwise excludable) so you automatically pass

3. perform 2 tests. All ees who completed 1 yr svc and age 21, and all other participants who didnt. slightly different than #2 because it might include HCEs.

Whatever you do for the ADP test, you must also do for the 410(B) test, except option 2 doesnt exist under 410(B)

[Guest Giovanni]

Thank you for your response. I was not referring to those type of employees. I was referring to employees such as home workers and certain type of salemen, as described in IRC 3121(d)(4).