Does the new employee needs SH for entering the plan early?

Not a 401k expert and the client asked the following:

Calendar 401k plan with 3% NESH and PS provisions, it is combined with a cash balance plan. Plans are top heavy and top heavy is provided under the 401k plan.

Eligibility is age 21/1 year and dual entry

Hiring a new employee on 10/1/2026 and sponsor wants to amend the 401k plan so that the employee can start deferring immediately.

Not amending the CB plan, just the 401k provision.

Does this employee also need to get SH i.e. ADP testing would be an issue if not? Possible top heavy issue too, at least in my opinion. Not providing PS allocation.

Thank you

Are you testing otherwise excludables separately or at least carving out? 

Usually no need for that subgroup to utilize a safe harbor.  Like, if everyone in the "main test" is getting the SH and probably none of the OEXs, then their OEX ADP test might not use a SH but should pass without HCEs.

And who gives OEXs top heavy minimums any more, really? 

Thank you for your input, yes I would be testing OEX separately. Everyone in the main test is getting whatever they need to.

Forgot about the no t/h requirement for OEX but I was mostly concerned about the ADP test.

Just make sure that the plan document would not inadvertently make this person eligible for the SH (i.e., the plan says whoever is eligible to defer gets the SH). You may need to specifically provide 21 & 1 dual entry for the SH.