SHM True Up

I feel like I've debated this several times already, but here goes... A 401k participant became eligible to enter the plan on 1/1, but didn't begin deferring until the next entry date, 7/1.  Is the plan sponsor required to true up the SHM for said participant based on his comp from 1/1-12/31?  Thanks.

Does the Plan require true up based on annual pay? If yes then you need to follow the document and give him a true up. The Plan can limit to compensation to while he is a participant but a non-deferring participant is still a participant. So if he entered 1/1 but didn't decide to start contributing until 7/1 he's still a participant as of 1/1.