If a person owns EXACTLY 5% of the plan sponsor, is he or she a "

[Guest CGBS]

If a person owns exactly and nor more than 5% is that person an HCE? I.E. Is it a MORE THAN 5% owner?

Thanks for your help.

[Alf]

It is MORE than 5%.

For purposes of the HCE rules, IRC Section 414(q)(2) cross references the 416 definition of 5% owner. IRC Section 416(i)(1)(B) defines 5% owner as a person who owns more than 5% of the outstanding stock (or possesses more than 5% of the voting power) of a corporation. For non-corporate entities, a 5% owner is anyone who owns more than 5% of the capital or profits interests of the employer.