Deferral "logic" for HCE

[SMB]

Non-top-heavy salary deferral only 401(k) Plan with prior year testing. Only 1 HCE, who is catch-up eligible for 2007. 2006 ADP for NHCEs was 5.0%.

Am I correct that for 2007, Plan will pass ADP if the HCE limits his deferrals to 7% of his comp PLUS his $5,000 catch-up?

Thanks!

[stephen]

yes