counted for ADP test or not

[thepensionmaven]

We have just taken over a 401(K0 plan from a payroll provider.

Eligibility 3 months, entry semi-annual.

Would terminated participants who work less than 500 hours be included in ADP/ACP tests?

[Lou S.]

If they have the right to defer they are in the ADP test.

If they have met the conditions to receive a matching contribution, they are in the ACP test.

You can test otherwise excludable employees separately.

[Tom Poje]

and taking it one step further

if they worked 3 month and met the entry date

they could have deferred, so they are included in coverage and ADP test (whether or not they defer)

assuming same conditions for match, they are included in coverage and ACP test.(whether they actually receive a match or not)

But if in addition there is any hours requirement or last day provision for the match and they failed that, then not on the ACP test.

as for coverage for match, it is optional to treat them as included and not benefiting if they terminated < 500 hours.