Moss Posted August 16, 2021 Posted August 16, 2021 I have a current year tested plan with 3 HCEs, no ownership, and a new hire that will become an HCE next year but entered this year with no deferrals. The NHCE can be classified as otherwise excludable since it's immediate entry. Plan does not allow for top paid group. All 3 HCEs basically maxed deferrals. Can the plan automatically pass ADP testing under the non-excludable participants since there were not any NHCEs or would the non-excludable participants calculation be 0% HCE max as well? TIA
Bri Posted August 16, 2021 Posted August 16, 2021 Using the carve-out rule, the NHCE is excluded from the test, and you pass by default. Moss 1
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