Employees excluded from the numerical coverage testing are known as what type of employees?

The term "excludable employees" refers specifically to employees who are not included in the numerical coverage testing for 401(k) plans. This includes employees who might not be eligible to participate in the plan due to specific criteria outlined in the Employee Retirement Income Security Act (ERISA) or the plan design itself.

In the context of coverage testing, which is designed to ensure that a retirement plan benefits a broad group of employees and does not disproportionately favor highly compensated employees, certain categories of employees may be excluded from this analysis. These typically include part-time employees, employees who haven't met a minimum age or service requirement, and those who are covered by a collective bargaining agreement.

By identifying these individuals as "excludable," it clarifies their status in relation to the plan's compliance testing, thereby ensuring that the testing results accurately reflect the broader employee population eligible to participate in the plan. This understanding is critical for plan administrators to maintain compliance with regulatory requirements and ensure equitable access to retirement benefits.

The other terms presented in the options do not accurately describe this group of employees within the context of numerical coverage testing.