HCEs and nondiscrimination test

[Guest dhoetger]

When running snap-shot nondiscrimination testing on a plan, how are employees who were highly compensated in the look-back year but no longer employed by the company treated? Are they disregarded for testing purposes since they are no longer eligible to participate in the plan?

[Guest]

by snap shot testing are you referring to the once evry three year option? if so, and you have a number of HCEs that are now gone, I am not sure you can use that option since that option is supposed to be represntative of a fairly constant scenario. I have never used it, so I can't say for sure.

[Guest Jim Kais]

I believe you are inquiring about an "interim" or "mid year" test. If that is the case, you would not include that HCE IF that individual did not have any eligible compensation for the plan year that you are testing.