I am working on the ADP test for a multiple employer plan that has included the 401(k) feature since 1999. In the 2001 plan year, an additional company signed on to be a part of the multiple employer plan. Would it be possible to use the deemed 3% NHCE percentage level since this is the first year the company is offering a 401(k) plan? OR Is it not possible since the plan itself has offered the 401(k) feature in past to other companies within the multiple employer plan?

Any assistance would be greatly appreciated. Thank you in advance.

Brian

Each participating employer within a multiple ER plan is tested individually for discrimination. I don't see any reason why you could not exercise the 3% election if this is the first year the employer has co-sponsored this plan.