401a26 and 11-g question

Very slow brain activity day

Plan fails 401a26 and need 4 additional participants.

Want to keep the cheapest options, surprise!

Bringing in 3 eligible but categorically excluded. There are a few others in this category but they would be costly to bring in for 401a26.

4th one is a not yet eligible employee i.e. not yet completed 21/1 requirement but really cheap solution.

Any problem bringing in the 4th candidate by 11-g rather than utilizing other already eligible and categorically excluded employees?

You can pick and choose provided the amendment has substance (likely, since all are active employees) and you are not using average benefits to satisfy coverage (likely not a reasonable classification) - but OK if your general test needs to pass with average benefits.

FWIW, I have heard some actuaries argue that if you are bringing someone in early that has not met the age/service requirements for 401a26 purposes, you need to expand the number in your 401a26 count to include those similarly situated ees you are not bringing in.  Also, if top heavy you would want to bring them into both plans unless you want to give the TH Minimum in the DB, which is probably not want you would want to do.