Can a money purchase plan provide for the following formula: 5.7% integrated formula; provided that each HCE physician in his/her first year of participation is limited to a $500 allocation, and each HCE physician in his/her second year of participation is limited to a $2,500 allocation? Doctors in their first couple of years of practice need as much $ in cash, so they asked regarding limiting allocations during these years.

I don't think there's a discrimination problem because its limited to HCEs, but is there something I'm missing?

Although it is not explicit in your post, it is implied that the 1st and 2d year doctors will receive $ outside the plan instead of allocations to the plan. If this is the case, this creates a non-qualified cash or deferred arrangement and the resulting problems.

If I misinterpreted the situation, I apologize.

It would be very unusual for a first year physician to be an HCE (earn over 80/85k in prior year) so first level may not be attainable!

Second you state the formula IS, then you state the Drs. are asked about contributions. A conflict here.

Otherwise, it seems fine.