disaggregation for ADP Test

[AlbanyConsultant]

For 401a4 testing, we can do some exciting disaggregation of the participants to get groups with the most beneficial characteristics for testing purposes.  How much of that is applicable to ADP testing?  There's the standard excludable employee segregation that can be done, but I don't recall if we can go any further than that.  I've found some slide decks on testing from seminars I've gone to (and online) but none have mentioned it so far, which is leading me to think that it's not a thing... or do I just need to keep digging?  Anyone have a direction to point me in?  Thanks.

[Mike Preston]

You can go just ever so slightly further by optionally including an otherwise excludable HCE in the non-otherwise excludable category. And if you have separate plans that satisfy 410(b) you can play pickup sticks, but not on a retrospective basis like you might with restructuring.  

[Luke Bailey]

Broad restructuring a la 401(a)(4) testing is prohibited for ADP. See 1.401(k)-1(b)(4)(iv)(B). It was big in the 90's before the regs prohibited.

[AlbanyConsultant]

On 4/30/2020 at 7:42 PM, Mike Preston said:

And if you have separate plans that satisfy 410(b) you can play pickup sticks

Not sure what you mean, Mike...

 

Thanks, Luke.  I was beginning to suspect that this was not as easy as in the profit sharing testing...

[Mike Preston]

Use different testing methods on each plan (or group of plans) that satisfies 410(b).

[Luke Bailey]

18 hours ago, Mike Preston said:

Use different testing methods on each plan (or group of plans) that satisfies 410(b).

Right. Can do if you actually have separate plans. 414(l) regs define what is a "plan" for this purpose.