The parameters of the Basic Data topic must be completed to perform any of the nondiscrimination tests.

Regarding the Employees of the employer, indicate whether the Database contains all data needed to run the tests, that is, all of the employees of the employer have records in the database. If that is not so and your database is missing records for some employees, as might occur in a controlled group situation, then select Apply overrides for total nonexcludables because, presumably, to the extent that some employee records would be excluded from processing, ProVal will need to add at least a certain number back in for the tests, thus overriding the selection of employees (for exclusion) by the Excludable employees in database parameter (see the next paragraph). Thus there are minimum numbers of employees, among both the highly compensated employees (HCEs) and the non-highly compensated employees (NHCEs), who must be retained for processing. Enter the numbers of HCEs and NHCEs that cannot be excluded in the text fields provided. (Note: it is presumed that, truly, this is just “employee” results; thus the database is not expected to contain records whose status field code is mapped to any ProVal status other than the “Active” status; any inactive records, including records whose status field code is mapped to the ProVal “Vested valued through active” status, will not be processed.)

See IRS Regulation §1.410(b)-6 regarding certain employees not taken into account in a nondiscrimination test even if they benefit under the plan. These are the Excludable employees in database. Identify the records to exclude from the tests by completing the Selection expression. If the selection expression is blank, no employees will be excluded. An exclusion under this parameter will not reduce the numbers of the employer’s non-excludable employees below the numbers entered as overrides (see the preceding paragraph). Note that this Selection expression is not used to exclude employees for the average benefit percentage test; for that purpose, a separate selection expression must be entered under the Average Benefit Percentage Test topic. Nor is this Selection expression used to specify which employees benefit under the plan; there is a separate Selection Expression for Employees in database benefiting under the plan, under the Ratio Percentage and Nondiscriminatory Classification Tests topic.

Coded field with exclusion reasons: Certain government forms completed for nondiscrimination testing require the itemization of exclusions by exclusion reason. ProVal will do this automatically if you indicate a database field that, for each excluded record, contains the reason for excluding that employee.

For the Highly compensated employees in database, select the Field identifying HCEs. This must be a coded database field.

For HCEs have code select the code in (value of) the specified HCE field that indicates an HCE. Records with any other value or with a missing value will be considered to represent NHCEs.

If any Accrual rates (normal and most valuable) fields in the database contain negative values, ProVal will treat them as such and use negative accrual rates in the tests. Check the Treat negative accrual rates as zero box to tell ProVal to set these negative rate values to zero. ProVal will first adjust the accrual rates for permitted disparity before modifying the rates.