What is nondiscrimination testing?
Nondiscrimination testing is an annual IRS-mandated evaluation of employee retirement, health, and welfare plans that ensures equal benefits for all employees, notwithstanding their position in the company. Nondiscrimination testing is part of the federal law ERISA (Employee Retirement Income Security Act of 1974), which requires a minimum investment in retirement and health care plans. While organizations can offer specific benefits to employees of different tiers, benefits covered by nondiscrimination testing must be offered equally to all personnel.