recognizing past service / 401k testing

Plan acquired entities with 400 new participants during the course of 2018 - all hired 2/1/18

Plan is recognizing service from date of hire for the 400 new participants

In 401k testing, I am excluding all those who do not meet statutory eligibility

Do I count the participants I'm recognizing past service for in the non-excludable test

It seems like I would not since their hire dates with the employer do not meet statutory eligibility regardless of the past service that is being recognized

Thank you

oddly enough, 2  weeks ago looked up something similar

in the ERISA Outline Book Chapter 8 Section VIII Part B 2f

would granting of service with a prior employer preclude treatment as otherwise excludable?

if prior service 'must' be credited under the predecessor employer rule of IRC 414(a)(1), then YES because the successor employer is really a continuation of the predecessor employer.

if prior service is granted 'optionally' (under 414(a)(2) then probably YES, but if they wanted to use otherwise excludable it would be a better approach not to provide prior service and simply allow the plan to have a shorter eligibility period for these employees.

But the IRS has never indicated on way or another.

but the 'optional' position gets back to my point, the plan could have done things another way and therefore as such the people wouldn't have entered and so that is how I end up 'since they could have been excluded they are otherwise excludable'

but I can accept someone taking either position.

But my copy is 2012, so maybe the write up has been changed

This question has come up several times. Here is a prior discussion:

I'm amused because Boris Badenov himself seems to have started the prior discussion. 

(I know...."I always have fiendish plan!!")