403b HCE

I see a 403(b) plan document that allows for cross testing. The definition of Highly compensated employee just refers to any employee who earned in excess of $120k in the lookback year.

Question: what if no employee earned in excess of $120k in the lookback year?

Thanks.

If no employee had compensation of at least $120,000 or was a five-percent owner, then no employee is a highly compensated employee, and the tests will automatically be passed.

Thank you Carol

We worked with an ERISA attorney on an 80 participant 403(b) many years ago (under the old rules). It was mainly straightening out 5 years of accounting on the plan. Under the old rules I seem to remember something about the highest paid with officer authority being the HCE if there were no others that exceeded the compensation threshold but that must have changed back in 2001.