What are the ERISA nondiscrimination requirements a qualified plan must meet?

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The correct answer relates to the Employee Retirement Income Security Act (ERISA) nondiscrimination requirements that qualified plans must meet concerning minimum participation and coverage requirements. These requirements are designed to ensure that retirement plans do not favor highly compensated employees over other employees, thus promoting fairness and equity concerning employee benefits.

In particular, the minimum participation requirement specifies that a certain percentage of employees must be able to participate in the retirement plan, helping to ensure broad access. Similarly, coverage requirements mandate that plans cover a fair cross-section of employees, not just selected groups, to comply with ERISA’s nondiscrimination standards. These elements are essential for plans to maintain qualified status and receive favorable tax treatment.

While automatic survivor benefits and top-heavy plan modifications are important features of retirement plans, they do not directly relate to the nondiscrimination requirements set by ERISA. Automatic survivor benefits pertain to provisions for spousal protections in retirement plans, and top-heavy rules address the treatment of plans that disproportionately benefit key employees. Therefore, these factors, while significant in their own right, do not fall under the specific umbrella of nondiscrimination requirements established by ERISA.