DB/DC combination testing

[emmetttrudy]

DB plan has two participants - both HCEs, one of whom is the 100% owner - receiving 8% of pay.

401k PSP provides for a 3% Safe Harbor contribution. My understanding is that since a key employee benefits in both plans they must be aggregated for 401(a)(4) testing. Is this correct? However, since both employees are HCEs, and both receiving the same benefit in both plans, I dont think there are any testing issues.

[Effen]

Is this a two person company where both are HCEs? If so, then as long as they are both benefiting in the db plan (401(a)(26)), you can pretty much do whatever you want with the benefits because there is no one to discriminate against.

Now if you have NHCEs in the company, you have some real issues...

[emmetttrudy]

Correct two HCEs. Thanks for the response.