The actual deferral percentage (ADP) and actual contribution percentage (ACP) tests are two of several nondiscrimination tests a plan must satisfy in order to remain compliant with IRS rules. Some of ...
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ADP/ACP Tests
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It’s rare that updates to the Form 5500 warrant little more than a yawn, if anyone other than those who prepare the forms even notice. That is NOT the case with changes issued by the Department of ...
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Facts We have been thinking about setting a safe harbor 401(k) plan and have heard that there are some pretty stringent timing requirements depending on some of the provisions we select.
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Facts Last week, you explained some the demographic data points that get reported on the annual census. Now, I’ve got some questions on the financial information I’ve been asked to provide to my TPA. ...
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Overtime Is Up and Bonuses Are Down: Will This Year's Irregular Compensation Impact our Retirement Plan?
Facts We sponsor a 401(k) plan for our employees and provide a company matching contribution to those who defer. Our plan specifies that in calculating that match, we only consider employee base pay ...
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Facts We currently sponsor a 401(k) plan and have been debating adding a safe harbor provision for 2021. While the idea of buying our way out of the ADP/ACP tests is appealing, we’re nervous about ...
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Facts As the director of a not-for-profit organization, I’m looking at retirement plan options for our employees. The fiscal year ends June 30th and I’d love to implement something to benefit our ...
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Facts Given the current uncertainty in the world economy and the unknown ongoing affects of coronavirus, I’m looking at all financial obligations for our company, and for opportunities to reduce ...
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Facts As the owner of a beachside hotel, I sponsor a calendar year 401(k) plan for my employees. In the summer we hire many part-time employees to assist with the uptick in guests and activities. Our ...
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Facts My company sponsors a safe harbor 401(k) plan so that all of the highly compensated employees can maximize their deferrals without worrying about failing the ADP test each year. Although we ...
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Facts We established our company on February 1st of this year, and now we are planning to launch our 401(k) plan. We know there are number of tests and determinations that require us to look at ...
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We’ve been through a few Corrections of the Quarter together now, and we appreciate you being along for the ride. We feel this is pretty good stuff but, at the heart of it all, we’re pension geeks ...
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Facts My architectural firm sponsors a 401(k) plan. We have 38 architects and 2 administrative assistants. We currently provide a matching contribution to participants and, some years, a profit ...
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Facts When we set up our new 401(k) plan last year, we decided not to add a safe harbor provision because we were not in a position to commit to the required contribution. Then we heard our TPA say ...
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Facts As a plan sponsor, I do my best to review the annual compliance reports my TPA sends to me, but to be honest, it might as well be written in a foreign language. For example, several of our ...
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Facts Our TPA just sent us our annual compliance report, and it says we failed testing! This is the first year we’ve failed anything, and now we’re being told that we need to take money out of the ...
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Facts I am fed up with sponsoring my current retirement plan. My wife and I contribute the maximum amount we can in deferrals each year. Due to low participation by our employees, we fail ADP testing ...
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Facts We set up our company 401(k) plan soon after we started our business. At the time, we were a small tech company with only a couple of employees. Over the years the company has grown ...
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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 ...
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Facts Our 401(k) plan failed the ADP test for the first time this year. We decided to correct the failure by making refunds to the highly compensated employees instead of making additional ...
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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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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 ...
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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 ...
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