Leased Employees

[emmetttrudy]

We were ready to set up a one-man DB Plan (owner and spouse) but he mentioned that he has another employee. She works for him however, is paid by a different company. The client reimburses the other company for a portion of her salary. Seems like she would be defined as a "leased employee". Assuming this is the case, can she or can't she be excluded from the new DB Plan for this client?

[Belgarath]

In the scenario you describe, the plan wouldn't pass coverage testing if the only eligible NHC is excluded.

[JAY21]

Sounds like a shared employee. A "reasonable" approach would be to cover her at whatever portion of her salary is for services to the sponsoring employer.