#### § 1.401(a)(4)-0 Table of contents.

This section contains a listing of the major headings of §§ 1.401(a)(4)-1 through 1.401(a)(4)-13.

## § 1.401(a)(4)-1 Nondiscrimination requirements of section 401(a)(4)

(a) In general.

(b) Requirements a plan must satisfy.

(1) In general.

(2) Nondiscriminatory amount of contributions or benefits.

(3) Nondiscriminatory availability of benefits, rights, and features.

(4) Nondiscriminatory effect of plan amendments and terminations.

(c) Application of requirements.

(1) In general.

(2) Interpretation.

(3) Plan-year basis of testing.

(4) Application of section 410(b) rules.

(5) Collectively-bargained plans.

(6) Former employees.

(7) Employee-provided contributions and benefits.

(8) Allocation of earnings.

(9) Rollovers, transfers, and buybacks.

(10) Vesting.

(11) Crediting service.

(12) Governmental plans.

(13) Employee stock ownership plans.

(14) Section 401(h) benefits.

(15) Definitions.

(16) Effective dates and fresh-start rules.

(d) Additional guidance.

## § 1.401(a)(4)-2 Nondiscrimination in amount of employer contributions under a defined contribution plan

(a) Introduction.

(1) Overview.

(2) Alternative methods of satisfying nondiscriminatory amount requirement.

(b) Safe harbors.

(1) In general.

(2) Safe harbor for plans with uniform allocation formula.

(3) Safe harbor for plans with uniform points allocation formula.

(4) Use of safe harbors not precluded by certain plan provisions.

(c) General test for nondiscrimination in amount of contributions.

(1) General rule.

(2) Determination of allocation rates.

(3) Satisfaction of section 410(b) by a rate group.

(4) Examples.

## § 1.401(a)(4)-3 Nondiscrimination in amount of employer-provided benefits under a defined benefit plan

(a) Introduction.

(1) Overview.

(2) Alternative methods of satisfying nondiscriminatory amount requirement.

(b) Safe harbors.

(1) In general.

(2) Uniformity requirements.

(3) Safe harbor for unit credit plans.

(4) Safe harbor for plans using fractional accrual rule.

(5) Safe harbor for insurance contract plans.

(6) Use of safe harbors not precluded by certain plan provisions.

(c) General test for nondiscrimination in amount of benefits.

(1) General rule.

(2) Satisfaction of section 410(b) by a rate group.

(3) Certain violations disregarded.

(4) Examples.

(d) Determination of accrual rates.

(1) Definitions.

(2) Rules of application.

(3) Optional rules.

(4) Examples.

(e) Compensation rules.

(1) In general.

(2) Average annual compensation.

(3) Examples.

(f) Special rules.

(1) In general.

(2) Certain qualified disability benefits.

(3) Accruals after normal retirement age.

(4) Early retirement window benefits.

(5) Unpredictable contingent event benefits.

(6) Determination of benefits on other than plan-year basis.

(7) Adjustments for certain plan distributions.

(8) Adjustment for certain QPSA charges.

(9) Disregard of certain offsets.

(10) Special rule for multiemployer plans.

## § 1.401(a)(4)-4 Nondiscriminatory availability of benefits, rights, and features

(a) Introduction.

(b) Current availability.

(1) General rule.

(2) Determination of current availability.

(3) Benefits, rights, and features that are eliminated prospectively.

(c) Effective availability.

(1) General rule.

(2) Examples.

(d) Special rules.

(1) Mergers and acquisitions.

(2) Frozen participants.

(3) Early retirement window benefits.

(4) Permissive aggregation of certain benefits, rights, or features.

(5) Certain spousal benefits.

(6) Special ESOP rules.

(7) Special testing rule for unpredictable contingent event benefits.

(e) Definitions.

(1) Optional form of benefit.

(2) Ancillary benefit.

(3) Other right or feature.

## § 1.401(a)(4)-5 Plan amendments and plan terminations

(a) Introduction.

(1) Overview.

(2) Facts-and-circumstances determination.

(3) Safe harbor for certain grants of benefits for past periods.

(4) Examples.

(b) Pre-termination restrictions.

(1) Required provisions in defined benefit plans.

(2) Restriction of benefits upon plan termination.

(3) Restrictions on distributions.

(4) Operational restrictions on certain money purchase pension plans.

## § 1.401(a)(4)-6 Contributory defined benefit plans

(a) Introduction.

(b) Determination of employer-provided benefit.

(1) General rule.

(2) Composition-of-work-force method.

(3) Minimum-benefit method.

(4) Grandfather rules for plans in existence on May 14, 1990.

(5) Government-plan method.

(6) Cessation of employee contributions.

(c) Rules applicable in determining whether employee-provided benefits are nondiscriminatory in amount.

(1) In general.

(2) Same rate of contributions.

(3) Total-benefits method.

(4) Grandfather rule for plans in existence on May 14, 1990.

## § 1.401(a)(4)-7 Imputation of permitted disparity

(a) Introduction.

(b) Adjusting allocation rates.

(1) In general.

(2) Employees whose plan year compensation does not exceed taxable wage base.

(3) Employees whose plan year compensation exceeds taxable wage base.

(4) Definitions.

(5) Example.

(c) Adjusting accrual rates.

(1) In general.

(2) Employees whose average annual compensation does not exceed covered compensation.

(3) Employees whose average annual compensation exceeds covered compensation.

(4) Definitions.

(5) Employees with negative unadjusted accrual rates.

(6) Example.

(d) Rules of general application.

(1) Eligible plans.

(2) Exceptions from consistency requirements.

(3) Overall permitted disparity.

## § 1.401(a)(4)-8 Cross-testing

(a) Introduction.

(b) Nondiscrimination in amount of benefits provided under a defined contribution plan.

(1) General rule and gateway.

(2) Determination of equivalent accrual rates.

(3) Safe-harbor testing method for target benefit plans.

(c) Nondiscrimination in amount of contributions under a defined benefit plan.

(1) General rule.

(2) Determination of equivalent allocation rates.

(3) Safe harbor testing method for cash balance plans.

(d) Safe-harbor testing method for defined benefit plans that are part of a floor-offset arrangement.

(1) General rule.

(2) Application of safe-harbor testing method to qualified offset arrangements.

## § 1.401(a)(4)-9 Plan aggregation and restructuring

(a) Introduction.

(b) Application of nondiscrimination requirements to DB/DC plans.

(1) General rule.

(2) Special rules for demonstrating nondiscrimination in amount of contributions or benefits.

(3) Optional rules for demonstrating nondiscrimination in availability of certain benefits, rights, and features.

(c) Plan restructuring.

(1) General rule.

(2) Identification of component plans.

(3) Satisfaction of section 401(a)(4) by a component plan.

(4) Satisfaction of section 410(b) by a component plan.

(5) Effect of restructuring under other sections.

(6) Examples.

## § 1.401(a)(4)-10 Testing of former employees

(a) Introduction.

(b) Nondiscrimination in amount of contributions or benefits.

(1) General rule.

(2) Permitted disparity.

(3) Examples.

(c) Nondiscrimination in availability of benefits, rights, or features.

## § 1.401(a)(4)-11 Additional rules

(a) Introduction.

(b) Rollovers, transfers, and buybacks.

(1) Rollovers and elective transfers.

(2) Other transfers. [Reserved]

(3) Employee buybacks.

(c) Vesting.

(1) General rule.

(2) Deemed equivalence of statutory vesting schedules.

(3) Safe harbor for vesting schedules.

(4) Examples.

(d) Service-crediting rules.

(1) Overview.

(2) Manner of crediting service.

(3) Service-crediting period.

(e) Family aggregation rules. [Reserved]

(f) Governmental plans. [Reserved]

(g) Corrective amendments.

(1) In general.

(2) Scope of corrective amendments.

(3) Conditions for corrective amendments.

(4) Corrective amendments must have substance.

(5) Effect under other statutory requirements.

(6) Examples.

## § 1.401(a)(4)-12 Definitions

## § 1.401(a)(4)-13 Effective dates and fresh-start rules

(a) General effective dates.

(1) In general.

(2) Plans of tax-exempt organizations.

(3) Compliance during transition period.

(b) Effective date for governmental plans.

(c) Fresh-start rules for defined benefit plans.

(1) Introduction.

(2) General rule.

(3) Definition of frozen.

(4) Fresh-start formulas.

(5) Rules of application.

(6) Examples.

(d) Compensation adjustments to frozen accrued benefits.

(1) Introduction.

(2) In general.

(3) Plan requirements.

(4) Meaningful coverage as of fresh-start date.

(5) Meaningful ongoing coverage.

(6) Meaningful current benefit accruals.

(7) Minimum benefit adjustment.

(8) Adjusted accrued benefit.

(9) Examples.

(e) Determination of initial theoretical reserve for target benefit plans.

(1) General rule.

(2) Example.

(f) Special fresh-start rules for cash balance plans.

(1) In general.

(2) Alternative formula.

(3) Limitations on formulas.

[T.D. 8485, 58 FR 46778, Sept. 3, 1993, as amended by T.D. 8954, 66 FR 34540, June 29, 2001]