3759 / What aggregation requirements apply to 401(k) plans?
Cash or deferred arrangements included in a plan generally are treated as a single cash or deferred arrangement for purposes of meeting the requirements discussed in Q 3754 through Q 3758, and for purposes of the coverage requirements of IRC Section 410(b).1 The deferral percentage taken into account under the ADP tests for any highly compensated employee who is a participant in two or more cash or deferred arrangements under plans of the participant’s employer that are required to be aggregated (as discussed above) is the average of the deferral percentages for the employee under each of the arrangements.2
Restructuring may not be used to demonstrate compliance with the requirements of IRC Section 401(k).3
1. See Treas. Reg. § 1.401(k)-1(b)(4)(ii).