Topic Archive: ACP Test

What Is a True-Up Matching Contribution?

DWC | 09/18/18

Facts

Our 401(k) plan provides for a matching contribution of 50% of the first 6% deferred by each participant (for a maximum match of 3% of pay per year).  We deposit the matching contributions to the plan each pay period at the same time we deposit employee deferrals.  After year-end for the last couple of years, our TPA has informed us that we have to make “true-up” matching contributions, sometimes for employees who are no longer with us.

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Decoding the Alphabet Soup: What's With All the Acronyms? | Part 1

DWC | 07/24/18

Facts

People in the retirement plan business sure do like their acronyms.  All these letters get thrown around, and I do not know what half of them mean.

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What Is the Deadline to Correct a Failed ADP/ACP Test?

DWC | 04/24/18

Facts

Every couple of years, our 401(k) plan fails the ADP/ACP test by a small margin. Since we don’t always fail the test, gathering our year-end census information to send to our TPA sometimes isn’t as high a priority as some of the other projects necessary to close out the year.

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When Can We Change Our ADP/ACP Testing Method?

DWC | 10/10/17

Facts

We have a 401(k) plan that allows for both employee deferrals and a company match. Our annual testing each year is based on the amounts contributed in the previous year. That has allowed us to notify our highly compensated employees of the maximum they can contribute each year to ensure we pass testing.

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