Permissive Disaggregation - Otherwise Excludable Employees

[Hickoo]

Generally, if a plan disaggregates otherwise excludable employees to satisfy the coverage requirements of IRC §410(b) its my understating it must do the same for nondiscrimination testing.  My question, if the plan does NOT disaggregate for coverage CAN it be disaggregated for nondiscrimination testing i.e., ADP/ACP.

In other words 410(b) would not be disag'd but ADP would be...?

[Bri]

I think the carve-out rule is technically separate from the normal disaggregation rules.  So if you're willing to throw any otherwise-excludable HCEs in to your statutory ADP test, then you technically haven't disaggregated for coverage, nor discrimination testing.

[CuseFan]

A "plan" must pass both coverage AND nondiscrimination. A "plan" each of your mandatorily disaggregated components and any permissively disaggregated components. You cannot choose to test "plans" A and B together for coverage but separately for nondiscrimination, whether nondiscrimination is ADP, ACP or general 401(a)(4).

[Hickoo]

Thanks for the comments.