Wandering HCEs in Controlled Group

[Guest cxs]

I am testing plans that are members of a controlled group. All plans are tested separately. I know if an HCE was eligible for 2 plans during the year the total contributions he made during the year must be used in both tests, but I am still confused:

1. Is it correct that total compensation is used in both plans, even though the document specifies while eligible compensation?

2. For NHCEs only compensation and contributions made under each plan are used in that plans test. Correct?

3. One HCE terminated a company in the controlled group in 2003 and moved to another company in the controlled group. In 2004 he received a bonus from the company he terminated from in 2003. The document states that in determining contributions only compensation paid to a participant while employed is taken into account. It seems to me that even though he had compensation from two companies he only needs to be included in one test. Is this correct?

Thanks!

[Tom Poje]

the new regs say

1.401(k)-2(a)(3)(ii)

an HCE who participates in multiple arrangements of the same employer is the sum of all contributions during such 12 month period that WOULD be taken into account with respect to the HCE under all such arrangements in which the HCE is an ELIGIBLE employee, divided by the HCEs compensation for that 12 month period (determined using the compensation definition for the plan being tested)...

see example 4 there are 2 plans, one is calendar year.

plan year = 7/1/2005 - 6/30/2006

ee enters one this plan on 1/1/06

you still use comp over the 12 month period when testing this plan.this example does not specify 'comp while eligible' but it does say in the example 'use comp for the period being tested.'