eligibility issues

[wsp]

401k plan with SHNEC and New Comp plan passes testing but only after limiting the ownership group to a contribution that is 10k-12k lower than maximum for each of 2 owners. There are additional employees recently hired that could change the results dramatically....

Can we amend the plan to make the eligibility for the profit sharing (and forfeitures) immediate while at same time leave eligibility for deferals and SH plan at 1 year with 6 month entry dates? At same time we would be removing the 1000 hour requirement but leaving in the employed at end of year requirement.

Plan is not top heavy and won't be for another 5 years or so at current contribution levels.

Doable?

[AndyH]

Within the context of:

"Can we amend the plan to make the eligibility for the profit sharing (and forfeitures) immediate while at same time leave eligibility for deferals and SH plan at 1 year with 6 month entry dates? At same time we would be removing the 1000 hour requirement but leaving in the employed at end of year requirement."

Sure, you can have different eligibility for PS and deferrals. And you can amend so that people who are not yet eligible would be affected. Is that the question, or is there something more?

[rcline46]

Why limit the NHCEs to 5%? They can get higher. Or do you mean you failed the 25% deduction limit? You did not indicate how they failed. Did you use 401(a)(4)-11(g) amendment to fix enough NHCEs already eligible to pass testing? I assume you are testing on an accrual basis. Do the HCEs have enough age spread to make it work? Lots of questions. Do you have sufficient HCE groups to do component plan testing - using -11(g) to make it work?