Effective Availability

[BTG]

I know this is asking for the obvious, but does anyone have any authority for the position that 1.401(a)(4)-4© only requires that a benefit right or feature be available on a non-discriminatory basis, and that there is no requirement that any NHCEs actually take advantage of the BRF, as long as it is available to them and they knew about it?

We have a situation where self-direction was available to all participants and it was in the SPD, but no NHCEs took advantage of it, so we're getting heat from the reviewing IRS agent.

[Guest Robin.Wolf]

Somewhat to my surprise, I didn't find anything "official" that expands upon what is in the regs. Sal Tripodi's ERISA Outline Book is very specific that "utilization is not relevant" (with a caveat about "effective" availability) but I guess if the IRS agent can't infer the correct position from reading the regs he probably won't think of Tripodi as authoritative!

[J Simmons]

I know this is asking for the obvious, but does anyone have any authority for the position that 1.401(a)(4)-4© only requires that a benefit right or feature be available on a non-discriminatory basis, and that there is no requirement that any NHCEs actually take advantage of the BRF, as long as it is available to them and they knew about it?

We have a situation where self-direction was available to all participants and it was in the SPD, but no NHCEs took advantage of it, so we're getting heat from the reviewing IRS agent.

If it was communicated adequately and no NHCEs directed the investments, I suspect you are dealing with a plan with a low number of NHCEs. If so, then you might want to get signed statements from each acknowledging that they were aware of the opportunity but did not take advantage of it, and then give those statements to the IRS agent.

[david rigby]

... he probably won't think of Tripodi as authoritative!)

How can this be?!

[K2retire]

... he probably won't think of Tripodi as authoritative!)

How can this be?!

Because they're secretly aliens! (edit) as in Men In Black aliens, not Non-resident Aliens.