Still Considered HCE?

[Dougsbpc]

We administer a 401(k) plan with about 60 participants. The plan sponsor is a partnership that is owned by 5 corporations. Each of the corporations employs one physician. They are all related employers and considered an affiliated service group. Each of the corporations adopted the plan as participating employers. One of the corporations will now drop to a 3% interest in the partnership and the physician who is employed by that corporation (and the 100% shareholder) will only have salary of about $20k per year for the next 5 years. Will that physician still be considered an HCE going forward? In other words, is he considered an HCE because of his ownership in his corporation?

Thanks

[ETA Consulting LLC]

Of course, he is. He is a 100% owner of one of the adopting employers of the plan. That, alone, makes him an HCE.

Good Luck!