HCE Determination

[Guest tjt169]

Plan year is 01/01. Employee acquired 6.2% ownership at the end of the business day on 12/31/2011. I know the employee would be HCE for 2012 but what about 2011. I know the ownership definition states:

The employee owns more than 5% of the employer at any time during the current plan year or during the 12 months preceding the plan year.

But since this employee acquired the ownership at the end of the business day on 12/31/2011, did he really have any ownership in current plan year (2011)?

Any thoughts?

[12AX7]

I don't think the regs differentiate between business hours or non-business hours for determination of HCE. For that matter, the regulations do not differentiate between time zones. If there is documenation that demonstrates this person was a 5% Owner in 2011, then I would say he is a 5% Owner for plan purposes in 2011.