help with dual eligibility question - deferrals and non-safe harbor match

Currently our plan has no age/service requirement for deferrals and the non-safe harbor match.  The non-safe harbor match is a payroll period match with no other allocation conditions.  The owner is trying to save some money and would like to amend the plan now to change the eligibility requirements for participation in the non-safe harbor match plan component and require an employee to be at least age 21 and have a year of service.  I understand from the TPA that this would be allowable, just as long as we pass coverage testing and ACP testing.  For the ACP component plan, the TPA is saying that we need to include in the testing group anyone who is eligible to defer, which would mean a lot of these employees who don't meet the new eligibility requirements for the match would be counted as receiving 0% match.  I was thinking we would be able to exclude the employees who don't meet the new age 21 and year of service requirements.  Can someone explain how these tests would work with the dual eligibility requirements? Thanks.

You can only change your eligibility prospectively. This would be very messy mid-year because people would have already become eligible for match - whether they deferred or not is irrelevant - and would need to be included in ACP testing as your TPA noted. However, your plan can carve out the early entrants who are otherwise excludable and test them separately, for ADP or ACP or both. That is fairly standard for plans with less than the statutory eligibility limits (21 & 1, dual entry) and can help testing unless you happen to have an owner's spouse or child becoming eligible.

Your TPA should be explaining all this and more. 

But in future years, if someone is eligible to make a deferral but somehow is not eligible to get a match, they are NOT included in the ACP test.  Still have to pass coverage though.