A test that must be performed for defined benefit plans , to ensure that the plan benefits at least the lesser of —
- 50 employees of the employer, or the greater of —
- 40 percent of all employees of the employer, or
- 2 employees (or if there is only 1 employee, such employee).
- Does not apply to defined contribution plans
IRC § 401(a)(26), Treas. Reg. §1.401(a)(26)-7(a)
Additional Helpful Information
The plan must satisfy the test on each day of the plan year