QNEC for new NHCE

[jmartin]

Facts:

Plan has immediate entry for 401k

Plan excludes HCE's

2010 NHCE ADP - 2%

2011 NHCE ADP - ?

EE hired April 2011 and will make $133k in 2011...becoming an HCE in 2012

Issue: When the EE was hired, the company did not give him an election form. They knew upon hire he would be come an HCE overlooking that he is a NHCE in 2011. They were going to give the EE an election form so he can contribute in November/December.

Question: I believe he is owed a QNEC (1/2 the rate of the ___) but what is the QNEC calculated on? Does he get 1/2 of the 2010 NHCE adp or do we wait for 2011 to be finished? My guess is that he still gets a QNEC even if he elects 0% on the election form for Nov and Dec.