considered a shareholder for PS or not?

[Guest algeis]

401(k)/PS plan is new comp. 6/30 PYE 6 different groups based on shareholder percentage and comp. and non-shareholder and comp. An employee has been a shareholder for years...effective 10/1/10 he is no longer a shareholder, I know he is still considered an HCE & Key, but for the PS, do I calc. him as a shareholde since he was for a portion of the plan year??? The doc. doesn't say you must be a shareholder as of the end of the plan year or anything.

[ETA Consulting LLC]

It is typically the Plan Administrator's (which is often the employer) responsibility to interpret what each provision of the plan means. Typically, when designing a new comp plan you would anticipate these issues and clearly define the groups to where the meaning is not debatable. Nonetheless, the Plan Administrator is generally authorized under the written language in the plan to actually interpret what the provision means. As long as such authority is written into the plan (providing the Plan Administrator that role), then their interpretation will prevail; except in instances where that interpretation is arbitrary and capricious. Basically, any consistent and reasonable interpretation should be fine; doesn't require a court ruling to determine the best interpretation.

Good Luck