General Nondiscrimination Testing for DC Plans (401(a)(4))

FIS Relius Education

Internal Revenue Code section 401(a)(4) is relatively short sentence that impacts much of what we can and cannot do within a qualified retirement plan by prohibiting discrimination in favor of highly compensated employees. Determining whether a benefit, right, or feature (from contribution allocations to access to participant loans or self-directed brokerage options) is discriminatory under law requires the application of complex rules.

This 100 minute web seminar will review the nondiscrimination requirements under 401(a)(4), including general-testing, cross-testing, and benefits, rights, and features testing and the application of the average benefits test.

Topics include:

• Introduction to the General Nondiscrimination Test
  
• Mechanics of the average benefits test
  
• Benefits, rights, and features
  
• Current and effective availability
  
• Testing allocations on a contributions basis
  
• Cross-testing (testing allocations on a benefits basis)
  
• Calculation of EBARs
  
• Nondiscriminatory classification test
  
• Imputing permitted disparity

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