ACP Testing Under Safe Harbor Plan

[LCARUSI]

Company is considering the follow safe harbor design:

- Employee can contribute on either pre-tax or after-tax basis

- 100% match on first 3% / 50% match on next 2%; employee receives match on first 5% of contributions regardless of whether they are pre-tax or after-tax or a combination of the two

Assuming all other safe harbor requirements are met, my understanding is there would be no ADP testing under this plan. My question relates to ACP testing. Which of the following (if any) is true:

- there is no ACP testing required, or

- ACP testing is required on all employee after-tax contributions, or

- ACP testing is required only on unmatched employee after-tax contributions.

[g8r]

After-tax employee contributions are always subject to ACP testing. The fact that they may, or may not, be matched doesn't matter.

[MWeddell]

ACP testing is required on all employee after-tax contributions. One may elect to include all matching contributions in the ACP test.