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Small Business Job Protection Act of 1996

Last Updated March 23, 2009


Small Business Job Protection Act of 1996, Pub. L. 104-188 (SBJPA )

Act which include provisions that provided tax relief for small businesses, protect jobs, and increased the take home pay of workers.

Retirement plans related provisions under SBJPA include the following:

  • Introduced the safe harbor provisions for 401(k) and 403(b) plans. Under this provision, nondiscrimination testing is not required if contributions satisfy the safe harbor formula.  See safe harbor 401(k) plans  and safe harbor 403(b) Plans

  • Introduced SIMPLE 401(k) Plans

  • Created Section 529 qualified tuition programs

  • Repealed SARSEPs effective January 1, 1997

  • Repealed the family aggregation rule that applies to ADP testing

  • Changed the definition of an HCE


Referring Cite

Public Law 104–188


Additional Helpful Information

  • SARSEPs that were adopted by December 31, 2006 were grandfathered. This allowed employers to continue maintaining those SARSEPs and transfer them between financial institutions