At my request my employer is looking into amending our company's plan document to include after tax contributions and in-plan conversions to Roth.
However when I asked about this I thought the owners/top management may be interested in utilizing this strategy. What I didn't anticipate/think thru is the Highly Compensated Employee rules and testing required. From what I understand the company must average the deferrals of every employee under 120k (HCE threshold) and then the above 120k folks may only contribute that much % or their deferrals get refunded.
So in conclusion, I will become an HCE in the near future. It sounds like I could be limited at that point and no longer can do 18,500?
The question I can't seem to find is, are after-tax contributions limited by HCE testing or not? Does this blow up my hopes of doing mega backdoor Roth?