Can Participant be excluded prospectively?

[Dougsbpc]

Have a 15 participant 401(k) plan that is top heavy.

The plan sponsor has always wanted all employees to be eligible for the plan upon being hired. However, they recently hired an employee who will be a very highly paid HCE. This employee will have no company ownership.

The employee is currently eligible for the plan. Can they exclude this employee from participation prospectively? There will be no problems passing 401(a)(4) and 410(b).

Thanks.

[Tom Poje]

yes, can be excluded, eligibility is not a protected benefit, only amounts accrued up to that point in time.