FAQ 632: ADP--Rerun after HCE shows with no 402(g) excess or catchup


What are the steps to rerun the ADP test if the 402(g) catchup/excess didn't compute correctly?


To rerun the test, do the following:

1. First, run the "Restore Contributions and Forfeitures" option that is part of the Reports-Compliance-Backup or Restore Contributions utility. This will zero out the catchup and excess amounts, and reset the amounts on the Contributions screen to their original numbers.

2. If you didn't backup before running the tests, you will need to zero out the catchup amounts (LIMITCAT screen) and any 402(g) or 415 excesses manually. The ADP excess and catchup amounts will be recalculated when you rerun the test, so you don't need to worry about those. You will also need to re-import or re-input the deferral amounts on the Contributions screen.

3. Run the backup program (Reports-Compliance-Backup or Restore Contributions) if it wasn't run the first time around.

4. Run the 402(g) routine and be sure to check the box that says "Save Calculated Changes". After the routine is run, check an employee who you know has catchup due to 402(g) and make sure that the catchup amount is shown on the Catchup Limits (LIMITCAT) screen.

5. If the plan has plan limits, run the Plan Limits routine and check one of the options to save changes. Check the Catchup Limits screen for these amounts as well.

6. Run the 415(c) routine. Same instructions as those for 402(g).

7. Run the ADP test. The HCE deferrals should show up as net of the 402(g) catchup.