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I have a plan that normally passes ADP easily and fails ACP (after-tax, no match) by a small margin. We use borrowing or shifting to pass the ACP test. We are considering changing the plan in a way that we think will encourage more after tax contributions by HCE's. If the passing margin of the ADP test is not sufficient in the future to cover the ACP test through borrowing or shifting alone, can we recharacterize pre-tax contributions as catch-up contributions to pass both tests, even though the ADP test passes without it?
