Save time with our cheat sheets, fact sheets, checklists & books!

February 16, 2009

Minimum Coverage Test

Print

Definition

A test that must be performed for qualified plans and 403(b)s to ensure the plan meets one of the following requirements:

  • The plan benefits at least 70 percent of employees who are not highly compensated employees.
  • The plan benefits:
    • a percentage of employees who are not highly compensated employees which is at least 70 percent of
    • the percentage of highly compensated employees benefiting under the plan.
  • The plan satisfies the average benefits test

Referring Cite

IRC § 410(b), Prop Treas Reg §1.410(b)-6(g)

Additional Helpful Information

More

Keep Learning

Applicable RMD Age

Applicable RMD Age The first year for which an IRA owner or plan participant must begin to take RMDs from their tax-deferred retirement account. RMDs

SIMPLE 401(k) Plan

Definition A SIMPLE 401(k) plan is a 401(k) plan established by a small business for it’s employees. Earnings accrue on a tax-deferred basis and distributions

Required Minimum Distribution (RMD)

Definition The minimum amount that must be withdrawn from retirement accounts, including qualified plans, 403(b) accounts, 457(b) accounts or IRAs, each year.  For retirement account

Required beginning date (RBD)

Definition The date by which a retirement account owner must begin distributing required minimum distribution (RMD) amounts from a Traditional,  SEP or SIMPLE IRA, a

Be among the first to know when

IRA Rules
Change