May a 401(k) Plan Exclude non-U.S. Citizens

[Guest Captain Pass]

I have seen a number of pension plan service providers state that 401(k) plans may limit eligibility in such plans to U.S. citizens. Nowhere have I seen a citation or authority for this proposition. The other issue is whether this would create problems for employers who use H-1(B) employees, and thereby are committed to equality in benefits.

[PensionPro]

Non-resident aliens with no US source income are considered excludible employees. IRC Sec. 410(b)(3)(B) and Treasury Reg. 1.410(b)-6© or thereabouts. Depending on the applicable tax treaty, certain non-resident aliens with US source income may be excludible. Resident aliens, H-1B, etc. may be excluded, but they are included in coverage testing.