ADP and ACP Tests (BN340)
Run ADP and ACP Tests (BN340) to determine whether a defined contribution plan satisfies the ADP (Actual Deferral Percentage) and ACP (Actual Contribution Percentage) tests. This report only includes employees with a work country of US.
You can use Highly Compensated Employee (BN305) to determine who should be identified as highly compensated on HR11.1.
For each employee, the report lists: compensation as defined on report parameters, the appropriate deferral from BN55.1 (DC/DB Account Balance) for the report option selected, and the percent of contributions for each employee. Totals are printed for both the highly compensated and the non-highly compensated groups. Contribution percents are totaled by highly compensated and non-highly compensated groups then divided by the total number of eligible employees in the group.
Processing Effect
The ADP test calculates and compares actual deferral percentages for highly compensated and non-highly compensated employees. The ACP test calculates and compares actual contribution percentages for highly compensated and non-highly compensated employees.
BN340 uses compensation from the Payroll application up to the maximum amount defined in BN12.1 (Benefits Annual Limits) for the plan year. The test can use pre-tax, after tax, and company match contributions. The test includes employees who are eligible for the plan based on the eligibility requirements defined in BN15.1 (Benefit Plan) for the plan.
The report shows highly compensated employees followed by non-highly compensated employees. The report lists the employees as highly compensated if you idnetify them as such on the Plan Test subform of Employee (HR11.1).