ADP/ACP Testing

[DTH]

Plan participant was excluded from making deferrals (and receiving ER match) in 2002 and 2003. The plan sponsor will be correcting the operational defect with a QNEC. The particiapnt is a NHCE. The plan passed ADP in 2002.

For the 2003 plan year. Do I include the QNEC in the ADP test? How do I handle the matching dollars?

Thanks!

[MWeddell]

It probably won't matter. If the NHCE that incorrectly was considered ineligible for the plan has been credited with QNECs equal to the deferrals and match that the average NHCE had in 2002, then the employee doesn't change the average ADP and ACP for NHCEs.