Must the one-time election (Treas Reg. 1.401(k)-1(a)(3)(iv)) be available to all participants?

[jkharvey]

Plan allows two classes of employees to make one-time elections to defer specified percentages into the Plan. These amounts are made on a salary-reduction basis. Does the Plan have to offer this to all participants? Is this election a BRF and must pass coverage to be nondiscriminatory?

[E as in ERISA]

I don't have the answer. But it is an interesting question. What if nonhighly comped were eligible for an employer plan and highly comped weren't. Then the employer has a new profit sharing with what is supposed to be a one-time election. It isn't excluded from the 401(k) rules for the nonhighly comped because its not a one-time election since they were already eligible. But it is a one-time election for the highly comped

[jaemmons]

The current impact of the election would necessitate the 401(a)(4) testing to demonstrate that the allocation of employer contributions (non-401(k)/(m) contributions) does not discriminate in favor of the hce's. I believe that this would take care of any nondiscrimination testing associated with the availability of the irrevocable elections. Just because it is only made available to limited classes of employees does not need to be tested separately.