Question about the immediate entry if hired by date feature

[jkharvey]

Brand new 401k plan is effective 1/1/2007. The plan has 1 year/age 21 entry requirements. To bring in the doctors as of 1/1/2007, they have an eligible if hired by 7/1/2006 date. Now, this leaves out severral NHCEs who were hired after that date but before 1/1/2007. I was wondering if this type of "feature" can be said to be discriminatory based on BRF or something. I understand about a pattern of amendments and such that would favor the HCEs but if this is the only thing the plan does that brings in HCEs and leaves out NHCEs for this year, is there a potential problem?

[Tom Poje]

yes but...

if you had set up the plan to have a 1 year wait and entry dates of 1/1 and 7/1 then anyone hired after 7/1/06 wouldn't have been in the plan anyway. in other words, while possibly 'discriminatory', testing 'otherwise excludable' ees separately would probably pass testing.

[david rigby]

Note that, under Tom's suggestion, anyone (including doctors) hired after 1/1/06 and before 7/1/06 will enter the plan on 7/1/07.