Section 420 Transfers--"Key Employees" after EGTRRA

[Scott]

Code Section 420© provides that assets transferred to a health benefits account cannot be used to pay health liabilities of "key employees" for the taxable year of the transfer. Section 420(e)(1)(D) provides that "key employee" has the same meaning as under Section 416(i).

Prior to EGTRRA, "key employee" was defined as an employee who satisfied certain requirements at any time during the plan year or the 4 preceding plan years. After EGTRRA, "key employee" means an employee who satisfies certain requirements at any time during the plan year (the 4-year lookback is removed).

Am I correct in interpreting this to mean that, for purposes of Section 420, an employer must exclude only those who are key employees during the plan year of the transfer, rather than anyone who was a key employee during such plan year or the preceding 4 years?