ACP testing

[Guest JohnSB]

If a participant of a 401k plan made deferrals and received match contributions then terminated and is fully paid out from a plan by the end of the plan year should they be included in the ACP test?

[Guest dmartin@swerdlin.net]

As long as an employee is eligible to receive a matching contribution during the plan year, he or she should be included in the ACP Test. By the way, an employee who otherwise would be eligible to receive a match, but chose not to make any deferrals, is still considered eligible for the match. Therefore, the answer is Yes, the employee who received a match, terminated and was paid out before the end of the plan year must be included in the ACP Test.