Trying to Determine who is HCE for Terminating Plan

[Mr Bagwell]

Trying to do final ADP test for a terminating plan.  Short plan year 10/1/2020 to 2/28/2021.

However, I am coming off of a short plan because of plan year end change.  6/1/2020 to 6/30/2020 ***meant 7/1/2020 to 9/30/2020****

By experience, I know of one employee that is HCE because he has been HCE last several years.  There may be one more.

I think I am looking for compensation for the time period of 10/1/2019 to 9/30/2020 to determine if HCE, correct?  And being that the plan year started in 2019, I'm looking for compensation over 125,000, correct?

 

[Mike Preston]

Dates are confusing.  How many short plan years are there?

[Lou S.]

Your HCEs based on comp are based on the 12 month look back year unless you are using the calendar year election in a non-calendar year plan.

So for your short PYE 10/1/2020 - 2/28/2021 your 12 month look back would indeed be 10/1/2019-9/30/2020. And yes it would be comp of more than $125K in that period. TPG election may or may not change results depending on your group but unless it was already in doc too late to amend now after PYE.

 

[Mr Bagwell]

15 hours ago, Mike Preston said:

Dates are confusing.  How many short plan years are there?

Sorry for they typos....  

What normal plan year end was: 6/30     last normal 6/30/2020

First short plan year because of fiscal year end change: 7/1/2020 to 9/30/2020

Short plan year because of plan termination: 10/1/2020 to 2/28/2021

[Mr Bagwell]

15 hours ago, Lou S. said:

Your HCEs based on comp are based on the 12 month look back year unless you are using the calendar year election in a non-calendar year plan.

So for your short PYE 10/1/2020 - 2/28/2021 your 12 month look back would indeed be 10/1/2019-9/30/2020. And yes it would be comp of more than $125K in that period. TPG election may or may not change results depending on your group but unless it was already in doc too late to amend now after PYE.

 

Thanks Lou!