Actually this amendment is changing the definition of Key Employees under IRC 416; 401k deferral testing are governed by HCE definition (in many cases these groups are one and the same in small plans but not necessarily the case). So this amendment would have no impact.Key Employee is part of Top Heavy rules under IRC 416, introduced by TEFRA back in 1982. Laws were designed to make sure that if plans provided at least 60% of benefits to key employees, then certain minimum contributions and vesting schedules would have to be met.Highly Compensated Employee was introduced with Tax Reform Act of 1986; a completely separate definition used in nondiscrimination testing and ADP testing. Changes to key employee definition don't impact HCE definition.
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