These nondiscrimination tests for 401 (k) plans are called the Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests. The ADP test counts elective deferrals (both pre-tax and …

Jul 1, 2021 · The ADP (Actual Deferral Percentage) and ACP (Actual Contribution Percentage) tests are nondiscrimination tests that traditional (non-safe harbor) 401 (k) plans must pass annually meet IRS …

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.

The ADP test compares the average percentage of employee 401(k) contributions (pretax and Roth deferrals) of eligible HCEs to the average percentage of employee 401(k) contributions of eligible …

All 401 (k) plans that do not have a Safe Harbor provision are required to undergo Actual Deferral Percentage (ADP) testing each year. If the plan has a discretionary (or non-Safe Harbor) matching …

Jul 24, 2024 · The Actual Deferral Percentage (ADP) test looks at the amount of pay that an employee has earmarked for a 401 (k) retirement plan. It examines pretax and Roth deferrals.

Jan 6, 2025 · The Actual Deferral Percentage (ADP) Test is a mandatory annual nondiscrimination test conducted by the Internal Revenue Service (IRS). It ensures that 401 (k) retirement plans do not …

The ADP test uses mathematical equations to compare the participation and contribution rates of the HCEs to the NHCEs in order to determine whether the plan is discriminating in favor of the HCEs.

Sep 19, 2024 · What is the ADP test? The actual deferral percentage (ADP) test is a compliance test that many 401 (k) plans are subject to. (Exceptions include owner-only plans, and so-called “safe …

The Actual Deferral Percentage (ADP) test focuses on how much employees contribute to their 401 (k) plans. It compares the average deferral percentage of highly compensated employees (HCEs) to non …