Federal Tax

Cash or Deferred Arrangements (Portfolio 358)

  • This Portfolio discusses the rules of §401(k) of the Internal Revenue Code and other provisions relating to qualified cash or deferred arrangements, also known as §401(k) plans.


Bloomberg Tax Portfolio, Cash or Deferred Arrangements, No. 358, discusses the rules of § 401(k) of the Internal Revenue Code relating to qualified cash or deferred arrangements. Part I of this Portfolio provides a brief overview of cash or deferred arrangements, their advantages, and the statutory requirements that apply to them. Part II discusses the background of cash or deferred arrangements and the evolution of the rules that apply to them. Part III includes a detailed analysis of the basic rules applicable to qualified cash or deferred arrangements. Part IV discusses the nondiscrimination rules that apply to a qualified CODA, and Part V discusses the special rules for design-based safe harbor plans. Part VI focuses on Roth contributions. Part VII deals with eligible automatic contribution arrangements. Part VIII discusses the §402(g) annual limit on elective deferrals and Part IX discusses catch-up contributions. Part X discusses the consequences of qualification or nonqualification under §401(k).

The Worksheets of this Portfolio contain a sample profit-sharing plan that includes a qualified cash or deferred arrangement, an eligible automatic contribution arrangement, and designated Roth contributions.

Table of Contents

I. Introduction
II. Background of Section 401(k)
III. Requirements of a Qualified CODA
IV. Consequences of Qualification or Nonqualification Under §401(k)
V. Section 402(g) Limit on Elective Deferrals
VI. Effect of a Qualified CODA on Other Benefits

Jason Bortz
Senior Counsel and Senior Vice President
Capital Group
Kent Mason
Davis & Harman LLP
David Raish
Retired Partner
Ropes & Gray LLP
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