Performing the ADP and ACP Tests

Determine whether a defined contribution plan satisfies the Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests. The ADP test calculates and compares actual deferral percentages for highly compensated and non-highly compensated employees.

Verify that your highly compensated employees have been flagged on Employee (HR11.1). Listing Highly Compensated Employees

To perform the ADP and ACP tests

  1. Access ADP and ACP Tests (BN340).
  2. In the Parameters section, use the following guidelines to enter field values:
    Plan Year Start Date

    Type the plan year start date. This is a required field.

    The application uses payroll records for the year beginning on this date to determine actual employee compensation. The plan year start date also determines which defined contribution records are used on the report.

    Plan

    Select a defined contribution plan that you want on the report.

    If you leave all the Plan fields blank, the report includes all defined contribution plans.

    Compensation

    Select the compensation you want on the report. This is a required field.

    The program uses compensation from the Payroll application up to the maximum amount defined in Benefits Annual Limits (BN12.1).

    Pay Class

    If you select Pay Class in the Compensation field, select the pay class that you want to use to determine compensation.

    Report Option

    Select the kind contributions you want to include on the report. This is a required field.

    Valid values are:

    • Pre-Tax

    • Pre-Tax and Company Match

      After-Tax

      After-Tax and Company Match

      Pre-Tax. After-Tax and Co Match

  3. Select the Add form function.
  4. Submit the report.