Discrimination in Employee Benefit Plans
IRC Section 129(h)--Safe Harbor Test

Background Reading

IRC Section 129 provides that the Plan is (a) non-discriminatory if it meets the eligibility tests by passing either the 70% or the 70/80% eligibility test (where eligibility is measured in terms of having the opportunity to participate but not actually doing so) and (b) is nondiscriminatory if it meets the Benefits and Contributions test by showing that there is not only an absence of per se discrimination but that there is no possibility of there being any discrimination by groups or classes of employees.  In addition, it must be shown that both the 5% Owner Concentration Test and the 55% Average Benefit Test must be met.