ADP/ACP Testing - Prior vs Current

[Guest kgsingletary]

I don't think this worked the first time - sorry if this is a duplicate...

New Plan effective 01/01/01

Document states Current Year testing method

Plan fails ADP/ACP/Multiple Use on Current Year basis, but passes on Prior Year basis.

After reading prior messages and IRS Notice 98-1. It seems as if for the first plan year you can test using Prior Year, then going forward use Current Year method.

I think my problem would be that the document says to use Current Year testing method and if I change to Prior Year I'm stuck for 5 years.

Any thoughts or better interpretations - please reply.

[Guest PJW]

Notice 98-1 imposes no restrictions or requirements on converting from prior year testing to current year testing, there are only limitations on switching from current year to prior year.

[Guest kgsingletary]

What about amendments? Would I have to do a plan amendment stating the change from current to prior for the 2001 plan year?