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Focus 01: Average Benefit Test: A Closer Look '14
Presentor: Stephen Forbes Recorded Date: 3/24/2014 Duration: 60 Min.


This program was recorded during a live presentation on March 24, 2014.

Focused Topic 01: Average Benefit Test: A Closer Look
Mondays with Derrin and Steve

To be an effective practitioner today, you must have an understanding of the average benefit test. Although administration software assists practitioners in performing the complicated test, a failure to understand how the test functions makes it difficult to troubleshoot when the plan fails. Practitioners who fail to master the average benefit test may be undertaking unnecessary plan amendments or expensive corrections.

The average benefit test also is frequently used to maximize disparity in cross-tested plans (i.e., under the general nondiscrimination test). Furthermore, practitioners must use the first step in the average benefit test (nondiscriminatory classification test) to test benefits, rights and features. So, as you can see, a practitioner just can’t practice effectively without a command of this test. In this presentation, using case studies, the speaker walks you through the test on a step-by-step basis so that you have the tools necessary to apply this test when applicable.

Topics include:

  • Mechanics of the average benefit test
  • Nondiscriminatory classification test
  • Reasonable classification test
  • What plans have to be aggregated
  • Average benefit percentage test
  • Testing on an allocations basis
  • Testing on a benefits basis
  • Benefits, right and features
  • Use in rate group testing
  • Nonexcludable employees
Prerequisites: There are no prerequisites or advance preparation for this program. The instructor will assume attendees are familiar with performing the ratio percentage test for coverage.

Level: Intermediate

Instructional Delivery Method
Group – Internet-Based

Speaker – Stephen W. Forbes, J.D., LL.M.
Author of The 5500 Filing Guide

Objectives: After the seminar, attendees should be able to:

  1. Apply the average benefit test for coverage purposes
  2. Use the average benefit test in nondiscrimination testing
  3. Determine which plans must be included
  4. Determine how to aggregate plans with different eligibility provisions
  5. Apply the test to benefits, rights and features testing
  6. Identify excludable employees
  7. Apply test on a benefits basis

Hardware System Requirements:

  • Windows Vista, Windows 7, or Windows 8
  • Internet Explorer 8 or later, and set browser to allow pop-up windows.
  • High-speed Internet connection.
  • 1023 x 768 or higher display resolution.
  • Soundcard and Speakers.

Software Requirements:

Program related requests, questions, or concerns may be emailed to: