Plan has Division A and Divison B with Different Match Policies

Division A has match going in every pay-period because these are basically salaried office workers.  The vast majority of the HCEs are in division A.  There are a bunch of employees with more sporadic work schedules and the client does not want to provide them with the match unless they work 1,000 hours and meet the last day requirement.

1) Straight coverage, my ratio %age fails but a hair, but my Average Benefits Test passes by a mile,

2) If I treat the timing as a BRF then I am still good because even if I treat the pay-period match as a BRF I'm over the nondiscriminatory classification threshhold.

Am I thinking this through correctly?

There are a few other items that may come into play in your analysis depending upon some other plan provisions the may exist and be an issue in operation.

• From the general description of the match, it sounds as if neither plan is a safe harbor plan.
• Does the salaried plan use a true-up?
• Do both plans match (or do not match) catch-up contributions and/or after-tax contributions?
• Is the rate of match at all levels consistent for all employees?  (This one may be a challenge due to the 1000 hour/last day rules for hourly employees.)

• From the general description of the match, it sounds as if neither plan is a safe harbor plan. correct
• Does the salaried plan use a true-up?  No it does not.  Pay-period only. Good question though...  So that is BRF in favor of the largely NHCE group.
• Do both plans match (or do not match) catch-up contributions and/or after-tax contributions?  Yes aside from timing it's the same exact match (no after-tax money).
• Is the rate of match at all levels consistent for all employees?  (This one may be a challenge due to the 1000 hour/last day rules for hourly employees.)  Same match formula but to your earlier point the match is "better" for the folks who get only a year-end match, and that group is disproporationately NHCE.

No matter how many different matching formulas you have it's all a 401(m) plan subject to coverage under 410(b) and nondiscrimination with an ACP test. 

You do have a BRF for each separate match based on the timing of deposits and, even though your rates are the same, if A doesn't have 1000 hours/last day rule then the rates really aren't the same. A term EE in A gets match but similar term EE in B gets zero. But if you're passing BRF for A on one you should on the other as well.