Exclusion from ACP Test

[emmetttrudy]

If the plan excludes a certain group of employees from receiving the employer match, but they are eligible to make employee elective deferrals, can this group be excluded from the ACP test? For these purposes, assume they are full-time employees and would have met all other statutory requirements.

[BG5150]

Yes, as long as it passes the coverage test.

[fiona1]

It's not an "option" to include someone on the ACP test. If a participant is eligible for the M portion of the plan, then they're included on the ACP. If they're not eligible for the M portion, then they are not included on the ACP.

Yes, you can carve out the "otherwise excludable" employees - but that's only after you've determined who is and isn't included on the ACP.

Keep in mind that Employee after-tax contributions (voluntary or required) are tested in the M portion of the plan. A participant may not be eligible for an employer match- but if they are eligible to make voluntary after-tax contributions - they must be included on the ACP.