What is a Qualified Plan?

A “qualified plan” is a retirement or deferred compensation plan that satisfies the requirements of Internal Revenue Code (Code) section 401(a), which includes standards for who can participate in the plan, how benefits are accrued, vesting schedules, distribution options, etc.  The most common types of qualified plans are 401(k) plans and traditional pension plans.  Some qualified plans (e.g., those sponsored by governmental entities and certain church organizations) are exempt from some of the 401(a) requirements, including the requirement to honor a QDRO.  Also, a qualified plan is not necessarily an “ERISA plan” (i.e., a plan that is subject to the Employee Retirement Income Security Act of 1974) and vice versa.  For example, a governmental qualified plan is exempt from ERISA, whereas an executive “top-hat plan” is a non-qualified plan that is technically an ERISA plan even though it is exempt from most of ERISA’s requirements.

DEFINED BENEFIT PLANS

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DEFINED CONTRIBUTION PLANS

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CASH BALANCE PLANS

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