Is it permissible to set up groups based on age?
For example :
Group A : HCEs
Group B : NHCE < age 40
Group C: NHCE > age 40?
Can we do this for HCEs as well?

yup.

Andy

what about someone who is age 40 during the year?

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by the way, putting on the finishing touches on the latest 401(k) song. this year's version is a Harry Chapin piece.

Think back to calculus. Nobody is ever an exact age, are they? Aren't they always under or over? Or would that be philosophy class? Same thing anyways.

Jack Benny was always 39.

Thanks!!! We were worried about discrimination issues but sounds like this will solve our problem of the client with MANY NHCE over 60!

I don't think we said it was a good idea, just that it was possible. I think it is not a good idea.

The lawyers here can speak to this better, but it seems to me that f you make sure you don't give older people less as an age group than younger people then perhaps you have avoided an age discrimination issue. Most plans of this type provide more to older people because that is how the math works.

Age discrimination in ERISA plans protects all employees, not just employees age 40. Accrued benefit in DB plans cannot decrease on account of increasing age or service. In DC plans allocation rate cannot be reduced because of attainment of any age.