204h notice - do I need for exclusions?

Hi

2 scenarios:

Scenario 1:

DB plan covers a group of employees (group A) but the sponsor wants them excluded effective 1/1/2027. Coverage is not an issue.

Do I need to provide them a 204h notice? I was planning to state group A is excluded as of 1/1/2027 in the amendment rather than stating group A's new formula is 0%.

I do not see any difference as it is a reduction in benefit and it should have a 204h notice either way. Never did it this way before.

Scenario 2:

DB plan states HCEs are excluded and all participants received the SPD stating it.

3 years down the road, a non-HCE participant becomes an HCE and no longer receives an accrual, just vesting. Does this participant need a 204h notice? There is a no separate grouping with 0% in the definition of groups, just an exclusion in the eligibility section.

Thank you

Scenario 1, definitely "yes"

Scenario 2, I think "no", since there is no "plan amendment" that caused the reduction.  That said, in order to avoid an HR problem, I would urge the sponsor to tell them, but I don't think they have a legal obligation to do so. 

What happens if they become a NHCE again?  Do they get accruals again, or one HCE then always excluded?  

Agreed, @Effen is spot on - (1) yes on 204(h) w/o a doubt; (2) no, since there was no amendment that resulted in the reduction of future rate of accruals.

Agreed with both and thank you.

To answer Effen's question, if they become an NHCE, accruals will resume as exclusion is specific if and only if an HCE.