exclusion language

[jane murray]

Our volume submitter plan document allows for the exclusion of HCEs using the following language...

Notwithstanding the foregoing, the term "Covered Employee" shall not include the following:

any Employee who is a Highly Compensated Employee for the Plan Year

Can the language be tweaked as follows to allow Jane Doe who is an owner HCE to participate?  I would like to exclude all the other HCEs.

Notwithstanding the foregoing, the term "Covered Employee" shall not include the following:

any Employee who is a Highly Compensated Employee for the Plan Year with the exception of Jane Doe

[Effen]

I can't address how it might impact the qualified status of a volume submitter plan document, but you would be legally permitted to exclude any HCEs that you want.

You will need to contact the document provider and ask if this type of adjustment impacts the determination letter. 

 

[SSRRS]

On 6/13/2021 at 2:23 PM, Effen said:

I can't address how it might impact the qualified status of a volume submitter plan document, but you would be legally permitted to exclude any HCEs that you want.

You will need to contact the document provider and ask if this type of adjustment impacts the determination letter. 

 

I have seen volume submitter interviews (to create the document) that in the exclusion section have a box labeled "other" and they ask you to fill in the other--ie in this case "Any employee who is an HCE". This seems to indicate that the VS Document allows you to enter additional exclusions? Thank you.

[Jakyasar]

Why can't you say

"Any HCE who is not a shareholder of the corporation is excluded". If any other type of entity, like partnership or sole proprietorship, you should be able to tweak the language. As SSRRS mentioned, some documents have the "other" language permitted but I would still check with the provider for the validity of the language.

If multiple owners, you may be able to tweak by adding a majority or minority owner (with some additional proper language).

If cannot be done that way, name should work but need to check with your document provider and make sure it is ok i.e. the additional language will still keep the plan in "pre-approved" status.

Using names may also force you to pass ratio test