You have asked whether certain positions related to the definition of “otherwise Excludable Employees,” used for purposes of coverage testing under § 410(b)(4)(B) and computing the actual deferral percentage (ADP) under § 401(k)(3), are supportable. Specifically, you have asked whether it is a Permissible Application of the statutory and Regulatory Provisions to treat the population of excludable employees for these purposes as comprising employees participating in the plan (1) for any period during which the participant has not attained age 21 or completed 1 year of service, and (2) for
any subsequent period ending on the earlier of (A) the first day of the next plan year after attaining age 21 and completing 1 year of service, or (B) 6 months after satisfying those requirements. We conclude that this is a permissible application of the relevant statutory and regulatory provisions, although not the only acceptable application of
those relevant provisions.