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the plan. For this purpose, an employee

retirement benefits, application of

determination regarding the

covered under a CBA is not considered

offsets or fresh start wear-away

design-based safe harbor under section

a collectively bargained employee if

formulas, or limits designed to satisfy

401(a)(4).

more than 2% of the employees who

section 415. An employee is treated as

If this is a section 401(k) and/or

are covered under the agreement are

benefiting under a plan to which

section 401(m) plan that does not

professional employees as defined in

elective contributions under section

contain a provision for nonelective

Regulations section 1.410(b)-9.

401(k) or employee contributions and

employer contributions, this option

matching contributions under section

Line 11e(3). Enter the number of

should be marked “No.”

401(m) may be made if the employee is

employees who do not receive an

currently eligible to make such elective

allocation or accrue a benefit under the

If any disaggregated plan relies on a

or employee contributions, or to receive

plan only because they do not satisfy a

non-design based safe harbor or a

a matching contribution, whether or not

minimum hours of service requirement

general test this option must be marked

the employee actually makes or

or a last day of the plan year

‘‘No.’’ The Schedule Q may be used to

receives such contributions

requirement, provided they do not have

request a determination regarding a

(Regulations section 1.401(k)-1(g)(4)

more than 500 hours of service, and

non-design based safe harbor or a

and 1.401(m)-1(f)(4)). However, do not

they are not employed on the last day

general test.

apply this rule to determine if an

of the plan year. Do not enter on this

employee is to be counted as benefiting

line any employees who have more

If this plan has been restructured

for lines 11i and 11k if, in accordance

than 500 hours of service, even if they

into component plans, this option must

with the Note following the instruction

are not employed on the last day of the

be marked “No.” The Schedule Q may

for line 11d, the information provided in

plan year.

be used to request a determination

lines 11e through 11k relates to the

regarding how each restructured

Line 11e(4). If this plan benefits the

portion of the plan that is not subject to

component plan satisfies the

employees of one QSLOB, enter on

the rule in Regulations section

nondiscrimination in amount

this line the number of employees of

1.401(a)(4)-1(b)(2)(ii)(B).

requirement of Regulations section

the employer’s other QSLOBs. This is

Line 11k. See the instructions for line

1.401(a)(4)-1(b)(2).

not applicable if the plan is tested under

11i for the meaning of ‘‘benefiting under

the special rule for employer-wide plans

the plan.’’

If “Yes” is checked, or if “No” is

in Regulations section

checked but a request for a

1.414(r)-1(c)(2)(ii).

Line 11l. To obtain the ratio

determination regarding a non-design

percentage:

Line 11e(5). Enter the number of

based safe harbor or a general test is

employees who are nonresident aliens

Step 1. Divide the number on line

made on Schedule Q, the determination

with no earned income (as defined in

11k (nonexcludable NHCEs benefiting

letter for the plan will also be a

section 911(d)(2)) from the employer

under the plan) by the number on line

determination regarding the section

that constitutes income from sources

11j (nonexcludable NHCEs).

401(a)(4) requirement that a plan not

within the United States (as defined in

discriminate in the amounts of

section 861(a)(3)).

Step 2. Divide the number on line

contributions or benefits.

11i (nonexcludable HCEs benefiting

Line 11g. Subtract the total of lines

under the plan) by the number on line

If “No” is checked, and a request for

11e(1) through 11e(5) as reported on

11h (nonexcludable HCEs).

a determination regarding a non-design

line 11f from the total employees

reported on line 11d. The result is the

based safe harbor or a general test is

Step 3. Divide the result from Step

number of ‘‘nonexcludable employees.’’

not made on Schedule Q, the

1 by the result from Step 2.

These are the employees who cannot

determination letter for the plan will not

be excluded from the plan for statutory

If the ratio percentage entered

be a determination regarding this

TIP

or regulatory reasons and must be

on line 11l and/or line 11m is

requirement, unless the plan is a

considered in the calculation of the ratio

less than 70%, the plan does

section 401(k) and/or section 401(m)

percentage even though they might not

not satisfy the ratio percentage test. In

plan only.

‘‘benefit’’ under the plan. If they meet

this case, the plan must satisfy the

Line 12a. Check ‘‘Yes’’ if the plan is

the age and service requirements of

average benefit test. A determination

intended to satisfy the permitted

section 410 and are not otherwise

regarding the average benefit test can

disparity requirements of section 401(I).

excludable employees, they must be

be requested using Schedule Q.

included in this number.

Line 11m. See the Note following the

Line 12b. To satisfy section 401(l), a

Line 11h. Enter the number of

instructions for line 11d. To determine

plan must provide that the overall

employees on line 11g who are highly

the ratio percentages for the section

permitted disparity limits are not

compensated employees (HCEs) as

401(k) and all section 401(m) (matching

exceeded and specify how

defined in section 414(q).

and employee contribution) portions of

employer-provided contributions or

the plan, follow the steps described in

benefits under the plan are adjusted, if

Line 11i. In general, an employee is

the instructions for lines 11d through

necessary, to satisfy the overall

treated as benefiting under the plan for

11l, but treat an employee as benefiting

permitted disparity limits. See

coverage tests purposes only if the

under the rules for section 401(k) plans

Regulations section 1.401(l)-5.

employee receives an allocation of

and section 401(m) plans described in

contributions or forfeitures or accrues a

the instruction for line 11i.

benefit under the plan for the plan year.

The plan will not satisfy the safe

Certain other employees are treated as

harbor requirements of IRC

Design-Based

benefiting if they fail to receive an

section 401(a)(4) if it does not

CAUTION

allocation of contributions and/or

satisfy section 401(l).

Nondiscrimination Safe

forfeitures, or to accrue a benefit, solely

Line 12c. This line provides a list of

because they are subject to plan

Harbors

the design-based nondiscrimination

provisions that uniformly limit plan

safe-harbor regulations.

benefits, such as a provision for

Line 12. This question may be used

maximum years of service, maximum

by certain plans to request an optional

-5-

Instructions For Form 5307 - Application For Determination For Adopters Of Master Or Prototype (M&p) Or Volume Submitter (Vs) Plans Page 5

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