BG5150 Posted February 28, 2012 Posted February 28, 2012 Do I have to be consistent year-to-year in using participation compensation vs plan year compensation in my prior year ADP testing? Also, do I have to be consistent in the population used? That is, can I pull out excludables one year, then include them them next? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
ETA Consulting LLC Posted February 28, 2012 Posted February 28, 2012 A plan passes non-discrimination each year, typically exclusive of how it was tested in any previous year. If the plan allows flexibility in the compensation that is used for testing purposes, then you can test under various definitions that satisfy 414(s). You cannot, however, test NHCEs under one defintion while testing HCEs under another. Not sure if that is what you are asking. Good Luck! CPC, QPA, QKA, TGPC, ERPA
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