How can you have PPS of over 100%? Do you essentially mean you're providing an incentive (in the short term) out of your own pocket to get miners to come over to your pool?
How is this incentive being paid?
There are plenty of ways for pools to do so. Private futures contracts, luck factoring on a grander scale than what most miners think on etc. As long as it's from a reputable solid provider it doesn't matter and is none of our business.
Well there is no harm in asking. I've never heard of 'elitehash' before, so asking how they operate is pretty reasonable.
If they don't want to answer, that's fine, but it is reasonable to ask how they can payout more than what is coming in through mining.