[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.410(b)-0]

[Page 550-552]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.410(b)-0  Table of contents.

    This section contains a listing of the major headings of Sec. Sec. 
1.410(b)-1 through 1.410(b)-10.

      Sec. 1.410(b)-1 Minimum coverage requirements (before 1994).

(a) In general.
(b) Coverage tests.
    (1) Percentage test.
    (2) Classification test.
(c) Exclusion of certain employees.
    (1) Bargaining unit.
    (2) Air pilots.
    (3) Nonresident aliens.
(d) Special rules.
    (1) Highly compensated.
    (2) Discrimination.
    (3) Multiple plans.
    (4) Profit-sharing plans.
    (5) Certain classifications.
    (6) Integration with Social Security Act.
    (7) Different age and service requirements.
    (i) Application.
    (ii) General rule.
    (8) Certain controlled groups.
    (9) Transitional rule.
(e) Example.

      Sec. 1.410(b)-2 Minimum coverage requirements (after 1993).

(a) In general.
(b) Requirements with respect to employees.
    (1) In general.

[[Page 551]]

    (2) Ratio percentage test.
    (i) In general.
    (ii) Examples.
    (3) Average benefit test.
    (4) Certain tax credit employee stock ownership plans.
    (5) Employers with no nonhighly compensated employees.
    (6) Plans benefiting no highly compensated employees.
    (7) Plans benefiting collectively bargained employees.
(c) Requirements with respect to former employees.
    (1) Former employees tested separately.
    (2) Testing former employees.
(d) Nonelective contributions under section 403(b) plans.
(e) Certain governmental and church plans.
(f) Certain acquisitions or dispositions.
(g) Additional rules.

  Sec. 1.410(b)-3 Employees and former employees who benefit under a 
                                  plan.

(a) Employees benefiting under a plan.
    (1) In general.
    (2) Exceptions to allocation or accrual requirement.
    (i) Section 401(k) and 401(m) plans.
    (ii) Section 415 limits.
    (iii) Certain employees treated as benefiting.
    (iv) Section 412(i) plans.
    (3) Examples.
(b) Former employees benefiting under a plan.
    (1) In general.
    (2) Examples.

         Sec. 1.410(b)-4 Nondiscriminatory classification test.

(a) In general.
(b) Reasonable classification established by the employer.
(c) Nondiscriminatory classification.
    (1) General rule.
    (2) Safe harbor.
    (3) Facts and circumstances.
    (i) General rule.
    (ii) Factual determination.
    (4) Definitions.
    (i) Safe harbor percentage.
    (ii) Unsafe harbor percentage.
    (iii) Nonhighly compensated employee concentration percentage.
    (iv) Table.
    (5) Examples.

            Sec. 1.410(b)-5 Average benefit percentage test.

(a) General rule.
(b) Determination of average benefit percentage.
(c) Determination of actual benefit percentage.
(d) Determination of employee benefit percentages.
    (1) Overview.
    (2) Employee contributions and employee-provided benefits 
disregarded.
    (3) Plans and plan years taken into account.
    (i) Testing group.
    (ii) Testing period.
    (4) Contributions or benefits basis.
    (5) Determination of employee benefit percentage.
    (i) General rule.
    (ii) Plans with differing plan years.
    (iii) Options and consistency requirements.
    (6) Permitted disparity.
    (i) In general.
    (ii) Plans which may not use permitted disparity.
    (7) Requirements for certain plans providing early retirement 
benefits.
    (i) General rule.
    (ii) Exception.
(e) Additional optional rules.
    (1) Overview.
    (2) Determination of employee benefit percentages as the sum of 
separately determined rates.
    (i) In general.
    (ii) Exception from consistency requirement.
    (iii) Permitted inconsistencies.
    (3) Determination of employee benefit percentages without regard to 
plans of another type.
    (i) General rule.
    (ii) Restriction on use of separate testing group determination 
method.
    (iii) Treatment of permitted disparity.
    (iv) Example.
    (4) Simplified method for determining employee benefit percentages 
for certain defined benefit plans.
    (i) In general.
    (ii) Simplified method.
    (5) Three-year averaging period.
    (6) Alternative methods of determining compensation.
(f) Special rule for certain collectively bargained plans.

                 Sec. 1.410(b)-6 Excludable employees.

(a) Employees.
    (1) In general.
    (2) Rules of application.
(b) Minimum age and service exclusions.
    (1) In general.
    (2) Multiple age and service conditions.
    (3) Plans benefiting certain otherwise excludable employees.
    (i) In general.
    (ii) Testing portion of plan benefiting otherwise excludable 
employees.
    (4) Examples.
(c) Certain nonresident aliens.
    (1) General rule.
    (2) Special treaty rule.
(d) Collectively bargained employees.
    (1) General rule.

[[Page 552]]

    (2) Definition of collectively bargained employee.
    (1) In general.
    (ii) Special rules for certain employees in multiemployer plans.
    (iii) Covered by a collective bargaining agreement.
    (iv) Examples.
(e) Employees of qualified separate lines of business.
(f) Certain terminating employees.
    (1) In general.
    (2) Hours of service.
    (3) Examples.
(g) Employees of certain governmental or tax-exempt entities precluded 
          from maintaining a section 401(k) plan.
(h) Former employees.
    (1) In general.
    (2) Employees terminated before a specified date.
    (3) Previously excludable employees.
    (i) Former employees treated as employees.

      Sec. 1.410(b)-7 Definition of plan and rules governing plan 
                     disaggregation and aggregation.

(a) In general.
(b) Separate asset pools are separate plans.
(c) Mandatory disaggregation of certain plans.
    (1) Section 401(k) and section 401(m) plans.
    (2) ESOPs and non-ESOPs.
    (3) Plans benefiting otherwise excludable employees.
    (4) Plans benefiting certain disaggregation populations of 
employees.
    (i) In general.
    (ii) Definition of disaggregation population.
    (5) Additional rules for plans benefiting employees of more than one 
qualified separate line of business.
(d) Permissive aggregation for ratio percentage and nondiscriminatory 
          classification tests.
    (1) In general.
    (2) Rules of disaggregation.
    (3) Duplicative aggregation.
    (4) Special rule for plans benefiting employees of a qualified 
separate line of business.
    (5) Same plan year requirement.
(e) Determination of plans in testing group for average benefit 
          percentage test.
    (1) In general.
    (2) Example.
(f) Section 403(b) plans.

                   Sec. 1.410(b)-8 Additional rules.

(a) Testing methods.
    (1) In general.
    (2) Daily testing option.
    (3) Quarterly testing option.
    (4) Annual testing option.
    (5) Example.
(b) Family member aggregation rule.

                      Sec. 1.410(b)-9 Definitions.

    Collectively bargained employee.
    Defined benefit plan.
    Defined contribution plan.
    Employee.
    Employer.
    ESOP.
    Former employee.
    Highly compensated employee.
    Highly compensated former employee.
    Multiemployer plan.
    Noncollectively bargained employee.
    Nonhighly compensated employee.
    Nonhighly compensated former employee.
    Plan year.
    Plan year compensation.
    Professional employee.
    Ratio percentage.
    Section 401(k) plan.
    Section 401(l) plan.
    Section 401(m) plan.

         Sec. 1.410(b)-10 Effective dates and transition rules.

(a) Statutory effective dates.
    (1) In general.
    (2) Special statutory effective date for collective bargaining 
agreements.
    (i) In general.
    (ii) Example.
    (iii) Plan maintained pursuant to a collective bargaining agreement.
(b) Regulatory effective dates.
    (1) In general.
    (2) Plans of tax-exempt organizations.
(c) Compliance during transition period.
(d) Effective date for governmental plans.

[T.D. 8363, 56 FR 47641, Sept. 19, 1991; 57 FR 10954, Mar. 31, 1992, as 
amended by T.D. 8487, 58 FR 46838, Sept. 3, 1993; T.D. 8548, 59 FR 
32914, June 27, 1994]