Otherwise Excludible HCEs?

[Guest beppie_stark]

Our plan was amended to permit deferrals prior to statuatory entry. 2008 was the first year. We elected to separately test OEs (under age 21, less than one year at the immediately prior entry date or covered by a collective bargaining agreement).

I remember learning that "no one is an HCE in the first year of employment except 5%+ owners."

I don't think that will prevent us from having OEs who are HCEs. An employee hired in Sept. 2008 and earned $150K in 2008, has a statuatory entry date of 1/1/2010, and will be an OE NHCE in 2008 and an OE HCE in 2009. Right?

Based on other threads and comments I believe my options are to test the OE HCE with the OEs or include the OE HCE in the regular testing group. Is that still correct under current regs.?

Thanks!

[Tom Poje]

you sound correct on all points for purposes of ADP/ACP - but not for nondiscrimination if the plan was cross tested

this assumes the person is an HCE regardless of whether a top paid group election was made or not