Fundamentals of Coverage, Non Discrimination Testing

[Gary]

My understanding is that:

- 401(k) elective deferrals are disregarded when determining non-discrimination rate groups

- catch-up deferrals are disregarded w/r/t non-discrimination testing

- 401(k) elective deferrals are included in determining the actual benefit percentage for the average benefit percent test.

Does anyone know where these aspects are explicitly stated?

Thanks.

[Guest Steve C]

Try 1.410(b)-7© as a starting point. That provides basic rules for mandatory disaggregation of 401(k), 401(m), etc. Catch up contributions can be reached through the 1.410(b)-7©(1) reference to 1.401(k)-2(a)(5).

For the average benefits test:

* 1.410(b)-5(b) tells us in part that the Average Benefits Percentage is determined based on "plans in the testing group," defined in 1.410(b)-7(e).

* 1.410(b)-7(e) tells us to apply -7(d)(2) (rules of disaggregation), but "WITHOUT REGARD TO paragraphs ©(1) through ©(2) of this section."

* 1.410(b)-7©(1) concerns the mandatory disaggregation of 401(k) and 401(m).