Guest Jhagan Posted May 28, 1999 Posted May 28, 1999 What is the refund (exclude earnings) to be paid to HCE 2 to enable the plan to satisfy the ADP test? -None of the HCE are related. -PY is 96 calendar year -No matching or nonelective contributions. -Gross compensation is used for testing. EE, Gross Comp, Elective Deferral HCE1, 150,000, 9,500 HCE2, 100,000, 9,500 NHCE1, 40,000, 1,600 NHCE2, 30,000, 1,500 NHCE3, 20,000, 1,200 Answer is $1,830.00 ???????
Dan Posted May 29, 1999 Posted May 29, 1999 NHCE ADP is 5.0%. So HCE ADP must = 7%. HCE1 def%=6.33, HCE2 def%=9.50. Total =15.83 must reduce to 14%. This means must reduce 1.83 of HCE2 def%. 1.83% *100,000 = 1830.
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