89. Contribution / Allocation formula
0325 Publ 6088 (PDF) · 2026-10-03 edition · updated 2026-10-04 · United States
Statement of Requirement: Reg. § 1.401(a)(4)-2(b)(2); Rev. Proc. 2023-37, 2023-51 I.R.B. 1491, sec. 9.03(3) and (4)
(Note to reviewer: Standardized plans must satisfy the safe harbor contained in Reg. § 1.401(a)(4)-2(b)(2). Therefore, except for employer matching contributions or contributions made under a cash or deferred arrangement as defined in § 401(k) of the Code, a Standardized plan must provide that contributions, forfeitures, and/or benefits must be a uniform percentage of compensation, excluding compensation in excess of the limitation under § 401(a)(17) (see LRM #6 for the definition of compensation). However, a plan may allow for permitted disparity pursuant to Code § 401(l) and the regulations thereunder. See LRM #29 for sample language.)
(Note to reviewer: No § 401(a)(4) failsafe language is allowed. The plan must pass nondiscrimination testing based on Reg. § 1.401(a)(4)-1 through § 1.401(a)(4)-13. Provisions attempting to provide a § 401(a)(4) failsafe are not permitted in Pre- Approved Plans.)
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