HCE Determination After Spinoff

[Just Me]

We have 401(k) plan that was formed as a spinoff from our prior company. (The company split in two, we each have our own stock now.) How do we determine HCEs for testing purposes? Should we consider HCEs from last year prior to the spinoff when we were all one company? Last year we were employed by the original company, which is not who we are now. (We were all employed by A, it split into A (continuation of A) and B. We are B.)

Thanks.

[Tom Poje]

there simply is no guidance at this time that I know of.

I suppose if you follow the rules for for mergers/acquisitions/othersimilar events that is found under the 401(k) regs you would be ok.

that is found at 1.401(k)-5 and clearly says "Reserved"

in other words - there is nothing out there yet. you make a good faith effort.

I'd personally lean toward putting the plan in a position that would be the same as it would today - e.g. if the individual had been working at least a year and would be HCE because of comp today then I would treat him as such. Its the people on the bubble of comp that are the difficult ones to handle.

does it make that much of a difference in testing?