Non-Discrimination Testing

Non-Discrimination Testing is an analysis to ensure employee benefits, like retirement plans, do not unfairly favor highly compensated employees, complying with IRS rules.

1. What is non-discrimination testing?
   Answer: It is an analysis ensuring fair benefit distribution per IRS rules.
   
2. What plans require it?
   Answer: Plans like 401(k)s and health benefits require it.
   
3. What is the purpose?
   Answer: It prevents favoring high earners and ensures compliance.
   
4. Who conducts it?
   Answer: HR or external auditors conduct it.
   
5. What are the consequences of failure?
   Answer: Failure may lead to penalties or plan disqualification.