SECTION 8. MODIFICATION OF REV.

PROC. 93–42

.01 Section 4.03 of Rev. Proc. 93–42 provides that, if a plan contains a definition of HCEs, an employer that uses the simplified method of determining HCEs under section 4 of Rev. Proc. 93–42 must amend the plan to incorporate this method, including the use of a snapshot day if applicable. This requirement applies even if HCE status does not affect the contributions or benefits provided under the plan.

.02 This revenue procedure modifies section 4.03 of Rev. Proc. 93–42 to apply only in those cases in which HCE status can affect an employee’s contributions or benefits under a plan, or the availability of other rights or features under the plan whether or not the plan contains a definition of HCE. For example, the results of the ADP test and the ACP test can affect the contributions of HCEs under a plan subject to those tests. If the simplified method of determining HCEs is used to determine contributions or benefits under the plan, or the availability of the other rights or features under the plan, the plan must include the simplified method.

.03 Section 4.03 of Rev. Proc. 93–42 is modified to read as follows: ‘‘.03 If HCE status affects an employee’s contribution or benefits under a plan, or the availability of other rights or features under the plan, and if the employer chooses to use the simplified method of determining HCEs under this section for purposes of contributions, benefits, or other rights or features under the plan, the employer must amend the plan to incorporate this simplified method, including the use of the snapshot day if applicable. Thus, for example, if the simplified method of determining HCEs is used for purposes of the ‘‘ADP’’ test or the ‘‘ACP’’ test in section 401(k)(3) or (m)(2), the plan must be amended to incorporate this simplified method.’’