BG5150 Posted April 1, 2008 Posted April 1, 2008 For the purposes of the "ADP" test, what does ADP stand for? Is it "Actual" Deferral Percentage? Or is it "Average" Deferral Percentage? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Guest mac_qka Posted April 1, 2008 Posted April 1, 2008 ADP is the acronym for Average Deferral Percentage ADR is the acronym for Actual Deferral Ratio. ADR is the participants actual deferral rate. For example, I earn $100,000 and during 2007 contributed $8750.00. My ADR is 8.75%. This is not representative of what my deferral elections may have been during the year. Hope this helps.
J Simmons Posted April 1, 2008 Posted April 1, 2008 "ADP" stands for ACTUAL deferral percentage. Treas Reg §1.401(k)-2(a). John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.
dmwe Posted April 10, 2008 Posted April 10, 2008 I agree it's Actual, even though it deals with averages. Leave it to the IRS to make it clear as mud.
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