Cross-testing & ESOP

If an allocation of stock is originally based on compensation, but then adjusted several times in order to pass 409(p), does the resulting allocation need to be tested as though the plan was using New Comparability?

You cannot cross-test an ESOP. You likely need to satisfy NDT on the basis of contributions unless the initial allocation was safe harbor and the subsequent adjustments are deemed safe harbor or resulted only in reductions to HCEs/increases to NHCEs.

You can't cross test but you can do an Average Benefits Test still.  You can also do a General Test based upon allocation rates you just can't convert to benefits.  

In all seriousness if you are having 409p issues and having to invoke the parts of the plan document that call for adjustments the issues are serious enough the client ought to be willing to pay to have an ERISA attorney who is very knowable of ESOPs involved.  

I work for a firm that specializes in ESOPs and we are full of people, myself included, who have worked on ESOPs for decades.  We would be recommending to the client to get the attorney in the loop.