Datair is only testing employees benefiting for the gateway tests thereby excluding terms because plan does not allocate to them.

Additionally, for purposes of 415© Compensation for the 5% gateway they indicate that you can exclude any compensation prior to a participants entry date.

I was under the impression that the 5% gateway had to be for all eligible participants and that the 3 times allocation rate was based on employees benefiting.

Any thoughts?

That's not true. The gateways apply to employees who benefit only. Anyone who gets an allocation (top heavy minimum for example) is subject to the gateway, so 3% might have to go to 5%, but a 0% does not have to become 1/3 or 5%.

And, the final regulations allow the 5% gateway to be based on post participation comp. That was a change ASPA pushed for.

Thanks with some addition research i came to the same conclusion. Looks like Datair has it right!