HCEs

[Guest Pete Joachim]

I'm doing HCE determination for 2002 for CY PY. Assume I have seven 5% owners and, in doing my 20% TPG calculation, come up with a total of 4 employees that could be in the TPG. However, the 4 highest paid employees each earn more than the seven 5% owners. I would assume then that I have a total of 11 HCEs for 2002. Sound right?

Also, in doing the 20% TPG calculation, I assume I include employees who terminated during 2001 in my overall number that is eventually multiplied by 20%.

Thanks for the assistance.

[Tom Poje]

correct on all counts.

assuming of course the terminees you talked about worked at least 6 months from date of hire, or average 17 1/2 hurs week, etc. Of course you can always be more generous and count everybody anyway.

also, it is possible that a non owner who made 140,000 quit in 2001 as well, and then you would not replace hime with the next person on the list.