Keeping Your ADP/ACP Safe Harbor Safe under Old and New Rules

Keeping Your ADP/ACP Safe Harbor Safe under Old and New Rules

Actual deferral percentage (ADP) and actual contribution percentage (ACP) safe harbor designs can eliminate the need for ADP and/or ACP testing and ensure that highly compensated employees can maximize deferrals and matching contributions under 401(k) and 403(b) plans. However, there are many nuance...

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Veröffentlicht in:Journal of Pension Planning and Compliance 2021-04, Vol.47 (1), p.1-32
1. Verfasser: Schwallie, Daniel
Format: Artikel
Sprache:eng
Schlagworte:
Compensation
Employees
Employers
Harbors
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Zusammenfassung:Actual deferral percentage (ADP) and actual contribution percentage (ACP) safe harbor designs can eliminate the need for ADP and/or ACP testing and ensure that highly compensated employees can maximize deferrals and matching contributions under 401(k) and 403(b) plans. However, there are many nuances to ADP/ACP safe harbor requirements that may be overlooked in design or administration that can cause a plan to lose its safe harbor status. This article considers those requirements including recent guidance on midyear changes to safe harbor plans.
ISSN:0148-2181