Another hypothetical design under the proposed Regs

[AndyT]

At the very end of the proposed Regs, the Plan Aggregation and Restructuring rules (Regs. 1.401(a)(4)-9) are amended to comply with the new gateway requirements. In particular, the Plan Aggregation changes only deal with DB/DC aggregation. It appears that ordinary aggregation of 2 DC plans remains unchanged by the proposed Regs.

So why not have 1 plan for HCE's and another for NHCE's? The plan for NHCE's would not have the gateway requirement, since it does not cover any HCE's. You would then aggregate the plans for 410(B) and 401(a)(4) testing.

Am I missing something here? Will the IRS close this loophole in the final Regs? By the way, do IRS officials read these message boards? :-)