Tests that are required to be completed by qualified plans and ERISA-403(b) accounts , to ensure that plan benefits/contributions do not discriminate in favor of officers, shareholders, employees whose principal duties consist in supervising the work of other employees, or highly compensated employees.
Nondiscrimination tests include the following:
Prop. Treas. Reg. 1.401(a)(4), IRC § 401(a)(4), IRC § 401(k), IRC § 401(m), IRC § 410(b).
Additional Helpful Information
- SIMPLE 401(k) and Safe Harbor 401(k) plans are not subject to the ADP and ACP nondiscrimination testing, providing they operate within established guidelines
- Employers that adopt qualified plans should consider consulting with a third-party plan administrator to ensure that the plan is operated in compliance with the Code and other applicable guidance.