FAQ 603: ADP--QNEC to offset top-heavy minimum. How to code?


I have a Plan that is currently failing the ADP test and it is top-heavy. We want to use the QNEC to help satisfy the part of the top-heavy minimum contribution. Is there a way to get the system to calculate this or is this something I must calculate once I know the amount of the QNEC? I tried running it through the system, but when I ran the top-heavy contribtuion calculations in compliance, it calculated the full 3% and not the reduced amount. So I am either doing something wrong, or I must do the calculation myself. Is this possible to do in ASC?


Here are the steps to follow:

1. Onthe Top Heavy Minimum screen in the plan specs, make sure that you have selected the QNEC source under "Reduce Top-Heavy Minimum".

2. Have a designated source to hold the QNEC amount and be sure to code the Force Contribution as "Yes-Use Transactions/Input by EE".

3. Run the ADP test and store the QNEC.

4. Using the grid, copy the calculated QNEC from the ADP Test fields on the Tests screen (ADPACNTB field on the TESTS screen) to the QNEC source on the Contributions screen (CCTBOTH field on the CONTRIB screen, followed by the subscript number for QNEC source).

5. Run the 416 Top Heavy Minimum Calculation routine. The system should then read that it is offset by the QNEC source and should show you any additional amounts that are required.