Otherwise Excludable Employees Testing Compensation

[Guest kdddk14]

I have just been reading the long thread regarding Otherwise Excludable Employees. I have not been able to find the answer to this question. For ADP testing, are we able to use compensation based on the statutory exclusion limit?

We have a plan that has immediate eligibility for deferrals but has a year of service with semi-annual entry dates for the profit sharing. If I have a participant who was hired on 3/17/08 and terminated on 7/10/09, could I use the compensation from 7/1/09-7/10/09 for ADP purposes although the participant had deferred from the beginning?

[BG5150]

For ADP testing, I believe, you can use any definition that satisfies 414(s).

[Blinky the 3-eyed Fish]

Testing on comp from date of plan entry is allowable, but you need to use the applicable entry date for the portion of the plan you are testing. The entry date for the 401(k) piece is immediate so you need to use full year 2009 comp for 2009 ADP testing. It doesn't matter that the PS entry is a later date.