401(k) Plans: Understanding the Rules

Summary

This practice note provides an overview of 401(k) plans, including a basis on which to consider the issues surrounding formation, qualification, and operation of a 401(k) plan to comply with requirements under the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA). The practice note also provides guidance on the types of entities that can have a 401(k) plan, how the nondiscrimination rules that apply to 401(k) plans can be satisfied, and under what circumstances employees can withdraw funds from a 401(k) plan.