NONDISCRIMINATION TESTING
01.Core Concepts
• In addition to the coverage tests for qualified plans, CODAs have two additional nondiscrimination tests • Actual Deferral Percentage Test (ADP Test) • Actual Contribution Percentage Test (ACP Test) • Three options for the employer: 1. Perform tests and take corrective action if fail, or 2. Adopt a standard safe harbor plan, or 3. Adopt a qualified automatic enrollment feature safe harbor