What is a 401(a) Plan?
A 401(a) plan is a qualified retirement plan.
The term “401(a) plan” is often used because that is the section of the Internal Revenue Code (IRC) under which the governing rules for qualified retirement plans are found. ( IRC Section 401(a), or IRC § 401(a). )
The following are qualified retirement plans:
- Qualified pension plans (such as defined benefit pension plans and money purchase pension plans)
- Qualified profit-sharing plans.
- Qualified stock bonus plan
IRC § 401(a), IRS Publication 560
Additional Helpful Information
A profit sharing plan can include a salary deferral feature, which is also known as a ‘qualified cash or deferred arrangement’. The salary deferral feature is referred to as a 401(k) plan, because it is governed under Section 401(k) of the IRC.
A 401(k) salary deferral feature can also be included in a a stock bonus plan, a pre-ERISA money purchase plan, or a rural cooperative plan.