Nondiscrimination rule

(redirected from Nondiscrimination Rules)

Nondiscrimination Rule

A provision of ERISA that requires employer-sponsored retirement plans to offer the same benefits in the same plans to all employees regardless of position in the company. That is, the nondiscrimination rule forbids employees of different rank from buying into the same plan and receiving different benefits. This protects both low income and high income employees. Plans violating the nondiscrimination rule are not tax deductible.

Nondiscrimination rule.

All qualified retirement plans, including 401(k) plans, must follow nondiscrimination rules. Among other things, the rules prevent highly paid employees from receiving more generous benefits than other employees.

However, employers may offer nonqualified plans to which antidiscrimination rules don't apply. Unlike contributions to qualified plans, contributions to nonqualified plans are not tax deductible.

References in periodicals archive ?
Including the Houston council's 2014 vote on HERO, nine Texas cities with populations of more than 100,000 had passed nondiscrimination rules or legislation.
Thus, it is an important complement to substantive nondiscrimination rules.
With nondiscrimination rules governing utilities, people get the same service.
401(k) plans must meet certain nondiscrimination rules that require non-highly compensated employees to participate in the plans at certain levels compared with the participation of highly compensated employees (called the actual deferral percentage test).
Such provisions would run afoul of nondiscrimination rules of the international trading system and would put U.
This policy would make exporting cumbersome and be contrary to the nondiscrimination rules of the international trading system.
Failure to meet the general nondiscrimination rules under IRC section 401(a)(4) as applied to 403(b) plans
They have, however, integrated new statutory and case law developments throughout their nine chapters, which are devoted to the origins and reasons for employee benefits and the Employee Retirement Income Security Act, employee pension plans, welfare benefits, regulation of employee benefit plans, preemption, plan administration, enforcement issues, nondiscrimination rules, and plan amendment and termination.
Otherwise, the health plan will violate nondiscrimination rules outlined in HIPAA (the Health Insurance Portability and Accountability Act of 1996), which prohibit basing group health plan benefits or contributions on an employee's health factor.
Basically, the nondiscrimination rules prohibit a plan from giving greater benefits to highly compensated individuals.
The following mandates are applicable only to those plans not grandfathered: nondiscrimination rules that prevent disproportionate benefits from being provided to highly compensated employees over non-highly compensated employees; implementing an external review process in addition to the internal review process; participant discretion in selecting physicians, pediatricians and obstetricians/gynecologists; and preventive care must be provided entirely at the employers' expense.