423 plans

[Guest llg]

Can a 423 plan impose a 2-year eligibility requirement for some employees but not all, e.g., union employees or employees of a division or subsidiary?

[david rigby]

I see nothing in IRC 423 http://www.fourmilab.ch/ustax/www/t26-A-1-D-II-423.html

or the regs http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html

which permits different eligibility for different employees, other than section 423( b)(4). No mention of collective bargaining. Notice subsection (5) requires the same “rights and privileges” for all employees who are “granted such options”.