Contribution Only to Selected Participants

[Nancy Pritz]

Is there a way to make some sort of annual company non-elective contribution just to a couple of participants without running afoul of all sorts of discrimination (or other) rules?  The plan I am looking at already makes matching contributions to all participants but does not make any unmatched contributions.  When you stop laughing, let me know your thoughts.  Thanks so much.

[Lou S.]

Is the select group highly compensated employees? (If yes, then you will likely need contribution to some or all NHCEs to pass testing)

Does the Plan document allow for varying rates of contributions to different employees? (If no, they you are dead in the water but you might be able to amend for future years.)

[Patricia Neal Jensen]

Lou is correct.  The Plan needs a Non-Elective option with single person group testing.  If the participants they want to benefit are NHCE's, then you should be OK.  If they are not, you will have to test and see where the deficiency lies and whether your client is willing to change the contribution to fix it.