Family Attribution - related to eligibility for Match

[Guest crosseyetester]

I am reviewing the work of another firm. I am unable to contact them for clarification and the client does not know a reason.

A son of an owner is included as an HCE. That is fine. The plan has a Match based on 1000 hours worked/last day. The son worked 705 hours and was active at the end of the year. He did not receive a match because he had no 401(k). However, he was included in testing as eligible/benefiting. No other active with greater than 500 hours was marked eligible. Is this simply a mistake? Or perhaps he is eligible, for lack of thinking of any other possibility, due to family attribution?

Thank you.

[Tom Poje]

based on what you indicated, I would have treated the ee as

1. includable and not benefiting for coverage

2. not included in the ACP test. (unless plan allows for after tax contributions, but then all particpants should have been included)

"He did not receive a match because he had no 401(k)."

no, even if he had deferred he would not receive a match because he did not work 1000 hours.

if the plan allows for after tax AND the plan has immediate eligibility, then there is also the possibility testing was done using 'otherwise excludable' tested separately - and this HCE was otherwise excludable, but used in testing anyway. since there are no HCEs in the otherwise excludable group, no report was generated.