| FAQ 40: ADP--Current year for ADP and prior year for ACP |
We have a plan that was effective 1/1/2003. The plan uses the current year testing method for the ADP test and the prior year testing method for the ACP test. How do I perform both tests for the first plan year?
1) Change the Plan Effective date in the specs to 1/1/2002.
2) Enter 3% for the non-HCE prior year ACP% in the View/Values/ADPTEST screen.
3) Run the ADP test using current percentages and the ACP test using prior percentages (by checking the "Use Prior Yr NHCE ACP Pct" box on the setup screen).
4) Change the Plan Effective date back to 1/1/2003.