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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    ERISA

Date & Time
  • event Date

    Tuesday, June 3, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

$347.00

This course is $0 with these passes:

CLE
ALL

This CLE webinar will provide employee benefits attorneys, plan sponsors, and administrators with detailed guidance on performing nondiscrimination testing and compliance for 401(k) plans. The panel will review the minimum coverage test, evaluate ADP and ACP tests for ensuring compliance with IRS nondiscrimination requirements, explain the benefits and costs of adopting a safe harbor plan design, assess the impact of SECURE 2.0, and outline the complex legal issues involved in multiple employer plans.

Faculty

Brandon P. Long
McAfee & Taft
Timothy Verrall
Ogletree Deakins Houston

Description

The IRS prohibits 401(k) plans from discriminating in favor of highly compensated employees and requires plan sponsors to conduct yearly nondiscrimination testing to ensure that contributions made by non-highly compensated employees or NHCEs are proportional to contributions made by highly compensated employees or HCEs.

Plans that fail nondiscrimination testing may be required to make corrective, taxable distributions to HCEs. In addition, there are certain aspects that must be considered under SECURE 2.0 as such relates to contributions, distributions, and long-term part-time employees. Each year, a large number of company plans fail the nondiscrimination tests, resulting in the return of contributions to HCEs. And some company plans that fail nondiscrimination testing also fail to properly make their corrective distributions.

Companies can avoid 401(k) nondiscrimination testing with safe harbor plans, but they involve strict requirements for companies to make certain minimum contributions to employee accounts. Plan sponsors must carefully weigh the benefits and costs before electing a safe harbor plan design.

Listen as our panel of employee benefits attorneys offers detailed guidance on performing nondiscrimination testing on 401(k) plans. The panel will discuss SECURE 2.0, minimum coverage, ADP and ACP tests for ensuring compliance with IRS nondiscrimination requirements, the benefits and costs of adopting a safe harbor plan design, and the complex legal issues that multiple employer plans present.

Outline

  1. Nondiscrimination rules under Section 401
  2. Nondiscrimination testing
  3. Minimum coverage test
    1. Actual deferral percentage (ADP) test for HCEs
    2. Actual contribution percentage (ACP) test for HCEs
    3. Cross testing
    4. Benefits, rights, and features
  4. SECURE 2.0
  5. Safe harbor plan designs: risks and opportunities
  6. Multiple employer plan issues
  7. Corrective action for noncompliant plans

Benefits

The panel will review these and other key issues:

  • How can plan sponsors maximize benefits for HCEs without violating the nondiscrimination rules?
  • What advantages does a cross-tested safe harbor plan offer?
  • What special rules and considerations apply to multiple employer plans?
  • What is the impact of SECURE 2.0?