Different Conributions Based on Marital Status

[Guest MDG]

I have a DC plan with various contributions (e.g. EE deferral, match, profit sharing). The plan recently added a provision (called a retiree health account). The company contributes a flat amount per year into this part of the plan. At retirement, I can either take the money (rollover to my IRA) or use it to purchase employer health insurance (and pay taxes on the withdrawal).

The plan does not put in the same amount for all employees. The amounts vary based upon age (under age 50 and over age 50), service (in 5 year bands), and marital status (single or married).

My question is: Can an employer make different contributions to a retirement plan based upon marital status?

Any help is appreciated.

[MWeddell]

Yes, it can, assuming it satisfies 401(a)(4) general testing.

I've seen this once before.

[Guest MDG]

Aside from compliance with the IRC non-discrimination rules (HCE v NHCE), can anyone think of an argument as to why this should NOT be permitted?

[jane123]

How about discrimination in general- who will be penalized- the married or the unmarried? Assume the contribution formula favors the married, what is the message you are sending to the unmarried? You must get married to receive a higher contribution amount? Ridiculous!!!

[Guest MDG]

I agree on the discrimination in general issue. However, from what I can see, this has gone on in welfare (health insurance) for some time. But, since this has been made a part of a qualified plan, I was not sure if it still had the same acceptance.

I am looking for some definitive way to challenge this, any ideas?