Coverage and Testing Issues

[Guest smac]

We have a non-standardized SH 401(k) PS. Some non-highly compensated employees have irrevocably opted out of plan. Where will they need to be counted in coverage and non-discrimination testing?

Thanks!

[Tom Poje]

once they have met the plans eligibility requirements, they are includable and not benefiting.

since they are not eligible, they would not show up in the ADP test (with a big fat 0), but if the plan is a safe harbor 401k that would be a moot point anyway.

in other words, if they are HCEs, they help coverage testing, if they are NHCEs they hurt.