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Does a governmental 401(a) plan require nondiscrimination testing?


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Guest wwc870

I have a plan administrator of a governmental 401(a) plan insisting that they required to perform Nondiscrimination Testing on their plan. Are their any regulations that require a 401(a) governemental plan to have compliance testing done?

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State and local governmental qualified plans are totally exempt from nondiscrimination testing under Internal Revenue Code sections 401(a)(5)(G) and 410©(2). Other governmental plans (e.g., federal governmental plans and plans of international organizations) are potentially subject to nondiscrimination rules under current law. However, postponed the effective date of those rules for governmental plans, and the pension reform legislation which has now passed the House, and is pending in the Senate, would eliminate the nondiscrimination rules for all governmental plans.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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And as Carol so correctly reminds us, there could be other statutes (at the state or local level) that have relevance to non-discrimination issues.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Hmm, Pax, guess I failed to remind everyone of that yet again on this thread? ;)

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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