Cross-tested 401(k) Plan and ESOP

[eilano]

Under current regulations, you cannot cross test in an ESOP. Could you merge an ESOP with a cross tested 401(k) Plan? Would you then be able to continue to allocate profit sharing contributions using a cross-tested allocation and then perodically purchase company stock with the profit sharing balances?

[CTipper]

not answering your question at all and probably hijacking the original question.

In order to keep the allocation to HCEs under 1/3rd, am I correct in presuming that it's allowable to allocate a lower percentage to the HCEs?

I know that may seem obvious, but I don't want to make that kind of assumption.

We usually use the phrase "cross-tested" to give HCEs higher contribution rates than the NHCEs. And, giving a lower rate to some or all of the HCEs is not prorata.

Thanks