Guest Pat Metallic Posted January 5, 2009 Posted January 5, 2009 An owner retired and sold his shares in 2008. His son works at the firm and continues to do so after his father's retirement. Both the former owner and his son are HCEs for the 2008 nondiscrimination testing. Will the son be an HCE for the 2009 testing due to his father's 2008 ownership? Assume the son's pay will be below the HCE comp threshold.
ERISAnut Posted January 5, 2009 Posted January 5, 2009 An owner retired and sold his shares in 2008. His son works at the firm and continues to do so after his father's retirement. Both the former owner and his son are HCEs for the 2008 nondiscrimination testing. Will the son be an HCE for the 2009 testing due to his father's 2008 ownership? Assume the son's pay will be below the HCE comp threshold. Of course he will. Earned above the HCE Comp threshold during the prior year; or was a 5% owner at any time during the current or prior year. Hope this helps.
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