How many times must the 401(a)(4) nondiscrimination requirements be addressed for QNECs?

The 401(a)(4) nondiscrimination requirements must be addressed twice in the context of Qualified Non-Elective Contributions (QNECs). First, when QNECs are made, a plan must demonstrate that these contributions do not discriminate in favor of highly compensated employees. This is necessary to ensure that lower-paid employees also receive equitable benefits, adhering to the nondiscrimination rules set by the Internal Revenue Code.

The second assessment occurs when evaluating the overall benefits provided to employees, which ensures that the entire plan, including those contributions, satisfies the nondiscrimination standards over the plan’s lifecycle. This dual assessment is crucial for maintaining compliance with federal regulations and for the 401(k) plan to retain its qualified status. So, the necessity to evaluate the nondiscrimination requirements at both contribution and benefit levels is what supports the conclusion that the requirements must be addressed twice.