To register for Relius Education seminars and conferences, please login or register for a new login account before proceeding. For more information, please see the Benefits of a Relius User Login Account. For assistance, please contact Client Services at 800-326-7235, and select Option 6.

401(k) BB 06: The Average Benefit Test
Presentor: Derrin Watson Recorded Date: 9/22/2016 Duration: 60 Min.

This program was recorded during a live presentation given on September 22, 2016 at 12:00PM EST.

Do you already know the basics of 401(k) plans, and want to move on to the nitty gritty? There are so many rules, that it is impossible even for a very experienced practitioner to remember them all. Each installment in this series will present a one-hour focused look at a single topic affecting 401(k) plans and provide the information practitioners need to know to be sure they are fully assisting the companies and participants they serve. You can brush up on a single topic, or view the whole set, either as a live seminar, where you can ask questions, or as an archived presentation on your own schedule. Our standard pricing has been discounted to make attendance to all sessions in this series more cost effective. The series will cover the following:

401(k) Plans: Beyond the Basics Web Series

  • 401(k) BB 01: IRS and DOL Correction Programs:More than Alphabet Soup
  • 401(k) BB 02: Plan Document Requirements and Deadlines
  • 401(k) BB 03: Eligibility and Vesting Design Considerations
  • 401(k) BB 04: HCEs and Compensation
  • 401(k) BB 05: Coverage Testing Issues
  • 401(k) BB 06: The Average Benefit Test
  • 401(k) BB 07: Elective Deferral Options
  • 401(k) BB 08: ADP Testing Techniques
  • 401(k) BB 09: ACP Testing Techniques
  • 401(k) BB 10: After-tax Contributions: The Other White Meat
  • 401(k) BB 11: Safe Harbor 401(k) Plan Design
  • 401(k) BB 12: Safe Harbor 401(k) Plan Operation
  • 401(k) BB 13: Distribution Restrictions & Hardships
  • 401(k) BB 14: Participant Loans: The Fine Print
  • 401(k) BB 15: All About Roth

401(k) Beyond the Basics 06: The Average Benefit Test

The average benefit test is not only a key part of coverage, but it also is part of the backbone of nondiscrimination testing. Increasingly, plans with nonelective contributions are straying from nondiscrimination safe harbors. And with more and more plans needing to run the general test, understanding the average benefit test is more important than ever. This program covers the general test and the average benefit test in nondiscrimination testing, and builds on the foundation established in the program “401(k) BB 05: Coverage Testing Issues”. Topics include:

  • Qualifications for the 401(a)(4) safe harbor
    • Allocations
    • Allocation conditions
  • Mechanics of general test in nondiscrimination
    • Contributions included
    • Determination of rate groups
    • AB%T in nondiscrimination
    • Target rates
  • General test on the basis of contributions
    • Multiple allocation rates
    • Imputed disparity
    • Discriminatory compensation definition
  • Introduction to cross-testing
    • Calculation of EBRs
    • Average benefit test in cross testing

There are no prerequisites or other advanced preparation for this program. The instructor will assume attendees have a familiarity with the average benefit test as used in coverage. Such a familiarity could come from attending the fifth program “401(k) BB 05: Coverage Testing Issues”. A minimum of two years of experience in dealing with 401(k) plans is recommended.

Level: Intermediate

Instructional Delivery Method: Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: S. Derrin Watson, J.D.
Recipient of ASPPA's 2006 Educator of the Year Award

Objectives: After attending the program you should be able to:

  • Determine if a plan qualifies for a nondiscrimination safe harbor
  • Accurately perform the general nondiscrimination test in a variety of situations
  • Correctly determine rate groups

All ownership and intellectual property rights in and relating to this website and all of its contents or any copies thereof, including but not limited to copyrights, logos, trademarks, service marks, design, text, videos, sound recordings, images, links, graphics, code, concepts and themes are owned by FIS and/or its subsidiaries (collectively "FIS") or used under authorized license by the FIS. Any recording, reproduction, transmission, distribution, publication, performance, broadcast, hyperlink, creation of derivative works or other use in whole or in part in any manner without the prior written consent of the FIS is expressly prohibited. Without the prior written consent of the FIS, you shall not insert a hyperlink to this website or any part thereof on any other website or "mirror" or frame this website, any part thereof, or any information or materials contained in this website on any other server, website or webpage.