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

February 16, 2009

Nondiscrimination testing

Print

Definition

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:

Referring Cite

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.
More

Keep Learning

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

Salary Deferral Contribution

Definition A contribution made pursuant to a participant’s election to have a portion of his/her salary/wages  contributed to his/ her employer sponsored plan  rather than

Be among the first to know when

IRA Rules
Change