Statutory exclusions for X-testing

[dmb]

A X-tested PS plan was set up effective 1/1/08. Client now says he intended to exclude a certain group of employees from participating. The data for the excluded group was never provided during the proposal and plan set up process. Some fo the employees in the group have been employed for a few years, but none has ever worked more than 1000 hours and possibly never worked more than 500 hours. The plan currently has no age or service requirements for eligibility or to receive an allocation. If the plan is amended to exclude the group effective 2/1/08, they will receive an allocation for January of 2008. For rate group and average bfts testing, can the excluded group be excluded from testing since they never worked 1000 hours and thus would not have met the statutory eligibility requirments of age 21 and 1 year of service?? Thanks.

[ak2ary]

They could be disaggregated into a separate plan with all of the other otherwise excludable employees. Tis separate plan, hopefully, would cover no HCEs and would thus be exempt from testing