Actual deferral percentage test for nondiscrimination

Reference no: EM1340036

All the following statements concerning the actual deferral percentage (ADP) test for nondiscrimination in a 401(k) plan are correct EXCEPT

A. If a plan fails the ADP test, the plan automatically becomes disqualified.

B. The plan does not have to satisfy the ADP test if a qualifying safe harbor contribution is made.

C. The plan stands a better chance of passing the ADP test if matching employer contributions are offered.

D. Salary deferrals that are treated as Roth contributions are still subject to the ADP test.

Reference no: EM1340036

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