re: Can someone explain the highly compensated employee 401k rule

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The HCE test is designed to encourage employers to make their plans attractive to lower income employees. Typically they have to do that by adding money from the employers end rather than asking the employee to take away from their wages with things like safe harbour contributions, good matching programs + auto enrollment.

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I agree with everything you're saying, but it doesn't always help or work. My Fiance's company matches 100% up to 6% total salary, and she's still limited. I'm not sure they do auto enrollment though.

I'm okay with the system, but it's not perfect. There are circumstances where there's nothing you can do to make low-middle income people save in their 401k.