Minimum Gateway DB/DC combo

DC plan has a last day requirement for nonelective allocations. DC plan gives a SH match, not a 3% SH nonelective.

The DB and DC Plans are top-heavy. The plans are written to say that employees in both plans receive 5% top-heavy minimum in the DC plan. Plans are combined for coverage and 401(a)(4) testing. Assume coverage and 401a26 are not problems, even is a handful of employees terminate. No one has under one year, so OEE is not in play here.

1. Suppose one non-key HCE is excluded by name or job class from the cash balance plan, eligible for the 401(k)/PS plan, but not deferring. That HCE terminates after working 1,000 hours. As an HCE, the gateway minimum does not apply. But, as a non-key employee, because they are not employed on the last day, no top-heavy allocation is required even though the plans are aggregated?

2. Now suppose a NHCE (also non-key) is excluded by name or job class from the cash balance plan, eligible for the 401(k)/PS plan, but not deferring. This NHCE also terminates after working 1,000 hours. As a non-key employee, because they are not employed on the last day, no top-heavy allocation is required? If that is true, then as an NHCE, they must receive the minimum gateway, but since the are not receiving any nonelective allocation, the gateway minimum is not triggered, so no allocation?

Please confirm or please set me straight on this. Thanks!

I would look at it this way:

1. The employee is not employed on the last day of the year, therefore they are not entitled to the DC top heavy minimum.
2. The employee is not a participant in the DB plan, due to being excluded by name or by class, therefore they are not entitled to the DB top heavy minimum.
3. The employee is not benefiting in the employer nonelective portion of the plan for coverage purposes, therefore they are not included in the nondiscrimination test.

Given these points, I agree that no allocation is required for either the non-key HCE or the NHCE.

Seems correct to me as well.

I also agree that the NHCE would not get either a TH or gateway allocation, however, wouldn't he have to be included in the discrimination testing since he worked over 500 hours?