EBP2111. Advanced Coverage Testing

Coverage testing under IRC Section 410(b) is a core nondiscrimination test that applies to all qualified plans. Sponsoring multiple plans, using leased employees, acquiring another entity by merger or acquisition, or owning or being owned by a foreign entity can complicate and impact this testing. This session will look past the basic Ratio Percentage test and explore more advanced testing techniques such as Average Benefits Test and plan aggregation options. You will also learn to identify failed tests and the options and timing for correction.

Learning Objectives:

• Compare the Ratio Percentage Test with the Average Benefits Test
• Analyze who is the Employer for the testing group, including the impact of mergers or acquisitions, foreign owned subsidiaries and leased employees
• Assess plan design features that may impact Coverage testing
• Identify testing options that may cure a failed test