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Are Govt plans subject to 414(s) testing?


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Governmental plans are not subject to current section 401(a)(4) or 401(a)(5), which regulate nondiscrimination in the compensation taken into account for benefits purposes. The only nondiscrimination testing applicable to governmental plans is section 411(e)(2), which provides that for vesting purposes, governmental plans are subject to pre-ERISA section 401(a)(4). Pre-ERISA section 401(a)(4) prohibited discrimination in favor of "officers, shareholders, persons whose principal duties consist in supervising the work of other employees, or highly compensated employees," but did not include the section 414(s) definition of highly compensated employee. Thus, section 414(s) has no application to governmental plans.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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