Testing Query

[Guest DBStudentAct]

I am relatively new to the field of Non Discrimination Testing.

The 2009 limits for determining a key and HCE are $160,000 and $110,000 respectively.

My understanding is that for a plan year beginning 1/1/2009, determination of key employee will be based on the 2009 limit but for the HCE, I should lookback to the 2008 year limit of $105,000 (since my plan uses retro salaries). Am I correct or getting confused?

TIA.

[WDIK]

Perhaps Publication 560 would be of assistance. Look at page 5.

http://www.irs.gov/pub/irs-pdf/p560.pdf