Contingent Benefit Rule and NQDC Plans

[Guest mbw]

Would you agree that if a participant has a choice to defer to a 401(k) plan or a nonqualified plan, this choice violates the contingent benefit rule of Code Section 401(k)(4)(A)?

[Steelerfan]

Would you agree that if a participant has a choice to defer to a 401(k) plan or a nonqualified plan, this choice violates the contingent benefit rule of Code Section 401(k)(4)(A)?

Not sure what you are saying. the ability to defer into a 401(k) can't be contingent on deferring into a nonqualified plan, but you can have the choice of deferring into either a 401(k) or a nonqualified plan. The problem i've seen is that some plans are spillover plans only and you don't ever get into the NQDC plan until you reach the qualified plan limit.