ADP test, prior year, 1st year with NHCE

[Guest crosseyedtester]

A plan was effective in 2000. Through 2002, only HCE's are participants.

In 2003, a participant entered the plan whose compensation in 2002 was below $90,000.

The plan tests on a prior year basis except for the "first Plan Year in which the Plan allows Elective Deferrals."

Since there were no NHCE's in 2002, does the plan automatically pass the test in 2003? Or is testing done on a current year basis as if it is the first plan year with deferrals?

[WDIK]

http://benefitslink.com/boards/index.php?s...opic=26356&st=0