Failed 401(a)(4) Discrimination Test? Retroactive Corrective Contribution Plan Amendment to the Rescue!

Tip of the Day

Have you failed 401(a)(4) discrimination test no matter what you have tried? Retroactive Corrective Contribution Plan Amendment can save the day. 

Regulation Section 1.401(a)(4)-11(g) allows one to satisfy the coverage or the nondiscrimination requirements, by making a retroactive amendment to the plan to correct the failure.

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Discrimination Testing Free Passes

Tip of the Day

The general discrimination test of Sec. 410(b) does not have to be done under the following four circumstances:

1.  Plan has no includable non-highly compensated employees (NHCEs) during the year.

2.  Plan has no highly compensated employees (HCEs) benefiting during the year.

3.  Employer had a merger or acquisition during the year or previous plan year.

4.  Section 410(b) discrimination testing has been performed within the past two years (3 Year Testing Cycle rule) . . .

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