Consider the following plans that are sponsored by four unrelated companies: Non-excludable employees Benefiting employees HCE NHCE NCE NHCEPlan I 5 100 1 40 Plan II 10 50 10 0 Plan III 5 95 5 35 Plan IV 50 100 0 40 How many of these plans satisfy the participation requirement of IRC section 401(a)(26)?
A)0
B)1
C)2
D)3
E)4

Question

Quizplus · Accepted Answer

Plans I, III, and IV satisfy the participation requirement of IRC section 401(a)(26), which generally requires that a minimum of 50 employees or 40% of employees (whichever is less) benefit under the plan. Plan II does not meet this requirement as no NHCEs benefit.

Consider the Following Plans That Are Sponsored by Four Unrelated