top paid group election with prior year testing

[K2retire]

I haven't been able to find any reliable guidance on this question. If a plan uses prior year testing, and adopts a top paid group election in 2011 you end up with 3 groups of employees: HCEs in both 2010 and 2011, NHCEs in both years and those who were HCEs in 2010 but are not in 2011 due to the election. When the 2011 testing is done, you compare the 2011 HCE deferral rates to the 2010 NHCE deferral rates. Are the people who were HCEs in 2010, but now are not in 2011 ignored for the 2011 test because they were not in either group at the appropriate time? Or are the 2010 deferrals of those individuals added to the 2010 NHCE group?

Since most of them are deferring at a high rate, I'd like to be able to add them to the NHCE group, but I wasn't sure if that was too aggressive.

[BG5150]

I wouldn't say they are not in the 2011 test. You are using the NHCE ADP for 2010. You compare that with the HCE ADP for 2011. If someone was an HCE in 2010, but not for 2011, then he or she will be part of the NHCE group for the 2012 test.

Everyone's ADR is used once and only once.