Non-Profit Interested in 401(k) Plan

[Dougsbpc]

There is a social club that wants a 401(k) plan for its employees. Since it is a non-profit corporation it appears there would be no key employees participating in the plan. In addition, it turns out there would be no highly compensated employees participating either.

I would think there would be no non-discrimination testing since there would only be non-key and nonhighly compensated employees. They have about 20 eligible employees but may want to more heavily benefit two employees who have worked there for many years. They will probably want to have salary deferrals and a good match for all eligibles. In addition, maybe they could provide an additional profit sharing allocation just to the long term employees. Have I missed something?

We have worked so extensively with plans that need to be general tested that I wonder if I am missing anything.

Thanks

[Tom Poje]

as long as the document permits different allocations to different people that is ok, you can discriminate amongst the NHCEs all you want.

as I recall, though the brain gears don't spin like they used to so I could be wrong, many many moons ago (pre 86???) the HCE definition was simply 'the top 1/3 paid' so you would have had testing in the situation you propose.

[QDROphile]

Not quite that long ago, but long, an employer always had at least one HCE.