410b

[TH 401k]

I have a doubt in 410b report.

My plan doesn't not have allocation condition for profit sharing contribution, and employee terminated with less than 500 hours inactive (i.e., current year terminated employees).

Whether these employees (HCE or NHCE) should comes under "Terms with 500 or less hours of service" in excludable employee section or these employees is Non- Excludable employees.

1. If possible explain me with allocation condition, last day rule with 500 hours

2. Only 500 hours allocation condition.

[Bri]

You can exclude a term with under 501 hours if

- they don't benefit, and

- the reason they don't benefit is specifically because the plan explicitly doesn't allocate benefits to people T<501

(in other words, not because of a class/division exclusion, and not because their allocation group would get zero anyway)

If your plan has no allocation conditions (and note you used a double-negative so I'm not sure which way you meant) then the folks would have only not benefited at the employer's discretion.