Ohterwise Excludables

[justatester]

I have several questions regarding the treatment of the otherwise excludables....

Plan information: 12/31 PYE, Prior Year Testing Method

I need to rerun the 2007 ADP/ACP Test. Since we are beyond the 12 month correction period, I believe I can not disaggregate the otherwise excludables into a separate group. Since the plan uses the prior year testing method, what averages do I use? In 2006, the plan did apply the otherwise excludable option. Do I now need to do a weighted average to adjust the 2006 average to be used in 2007.

In addition, since I am not allowed to disaggregate for 2007, how does that impact my 2008 test? For 2008, can I disaggregate?

Any help would be appreciated!

[Tom Poje]

there is no requirement that testing use the same assumption every year -you can use otherwise excludable one year and not the following if you so desire. if you are using prior year testing, then whatever method you use for the prior year NHCE you use for the current year HCE. but that has no effect on what you choose for the 'current year' NHCEs. hence next yeari if you use OE for the prior year' NHCEs the HCEs would use OE as well.

also remember, that there are actually 2 options available under OE - one is simply that you can never have an HCE who is otherwise ecludable.