Avg Benefits Test and Cross Testing

[Guest Michele Ciz]

I have a ps plan that is cross-tested and excludes certain employees. I have an employee with a large account balance that has now changed positions (and actually went from an HCE to NHCE), and is excluded for plan purposes. My question is, can we use this employee's account balance in the average benefits test? Or, since we this participant is considered not benefitting for the ratio test, is it also excluded for the avg ben test? If not included, we fail the ABT and have problems with 401a4.

[Tom Poje]

I personally have never done accrued to date testing, which is the only time account balances would ever be used (in both avg ben % test and ratio % as I understand it). otherwise, if doing annual testing, no the acct balance wouldn't be used. if ee switched from non-union to union, then they would be excluded entirely, but if it is simply a 'category' then it sounds like you are doing things correctly and treating the person as a 0 (includable and not benefiting)