Non-Discrimination testing for Simple 401(k) plans.

[Guest Sara H]

I know that the Simple 401(k) plans do not have to worry about the ADP/ACP testing, however what tests DO they need to worry about? I know that the Section 415 limits apply and I think that the 410(B) test applies ... any others?

[Gary Lesser]

Just the 415 limits. It is not necessary that 70% actually defer (but I suspect you knew that already).

[Guest Paul McDonald]

I always thought that since it is still a 401(k) plan that in the event that the employer fails to make good on say the match, that the plan would then fall under all the normal requirements of a 401(k) and hence have to satisfy ADP, top-heavy, etc. I do not see that you are allowed to omit these provisions from the plan document just because you added the SIMPLE provisions.

[Kathy]

I'm not sure but wouldn't failing to follow the rules in a SIMPLE 401(k) simply blow it out of the water (the qualifed plan pool)? Don't the rules say the employer must make good on the promised contributions? Maybe we're confusing SIMPLE 401(k) with safe harbour 401(k)? Life has gotten way too confusing in the retirement plan arena.

[This message has been edited by Kathy (edited 05-21-99).]