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How Are Corrective Refunds Determined for a Failed ADP Test?

DWC 08/21/18
QOTW - 8.21.2018
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 contributions for the other participants. However, when we got the actual refund amounts from our TPA, we were surprised to see that those HCEs with the highest ...
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Decoding the Alphabet Soup: What's With All the Acronyms? | Part 1

DWC 07/24/18
QOTW - 7.24.2018
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
QOTW - 4.24.2018 - What is the Deadline to Correct a Failed ADP or ACP Test - Qualified Plan Compliance
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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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.

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