DD's school mentioned that in 1st and 2nd grades they have three spelling groups. A small group of the spelling challenged, a large group of average spellers, and a top group of photographic memory spellers who get vocabulary, Greek and Latin instead of lists. They said that the first group of children are generally spelling from the 3rd grade lists.
They also promised us that they don't have names or leveling for the groups but they also told us that the kids figure it out pretty quickly. LOL!