FAQ 606: ADP--Gap period earnings on daily plans


On daily plans, is the system set up to calculate gap period earnings?


The ADP test will calculate gap period earnings based on the 10% safe harbor method, which can be used with either daily or balance forward plans. However, you would want to make sure that you have closed out 12/31 before you run the test, so everything is correctly posted. To produce gap period earnings, input an Interest Calculation Date on the Corrections Setup screen of the ADP test that is something beyond 12/31.