HCE counted as eligible for deferral?

[Guest arlrads]

My question is: for purposes of ADP testing, are HCE's considered eligible for deferrals for the 401k portion of a plan, when realistically they cannot defer because they receive the maximum company contribution to the profit sharing portion of the plan.

[Guest cease]

For ADP purposes, I think you would count the HCEs as eligible (0% deferral rate), regardless of receiving maximum 415 contribution through employer contributions.

I am also assuming that these participants elected not to participate in the 401(k) feature, otherwise, they would have contributed to the plan during the year and when the ER contribution is determined at the end of the year, the allocation would be limited to the extent of the 401(k) contributions.

[Tom Poje]

see the last line of 1.401(k)-1(g)(4)(i)

"An employee does not fail to be treated as an eligible employee merely because the employee may receive no additional annual additions because of section 415©(1)"