Is a plan permitted to limit participation to salaried employees who are HCEs? I'd like to focus on the eligibility rules, so please assume that the plan has no testing problems.

The eligibility rules include testing. You should focus on the rules under code section 410(b) and the coverage testing.

I'm really asking whether HCE status can be an eligibility requirement in addition to age and service if you somehow pass testing (which we would...believe it or not). I'd rather not get into the details of how we pass.

What do you really mean by "eligibility"? How would you treat someone who shifts back and forth between HCE and NHCE status (or are you counting on that not being possible)? Consider allowing all Es to be eligible but say that the allocation for an E for any plan year in which he/she is a NHCE is $1.00.

You can kick someone out who is an HCE, so I don't see why you can't go the other way. The only requirement is that you pass coverage. I know you don't want to divulge any trade secrets but the only this works is if you have another plan with NHCE's that you are aggregating for testing. Just for ha ha's, is it something more interesting than that?

Right, we have another plan with the NHCEs.