Is there a way to learn ADP/ACP testing on my own? Is there a book, or

[Guest Kimberly Stewart]

Is there a way to learn qualified plan testing on my own? Is there a book, or manual?

I am looking to move to another employer, I am offered a great opportunity, but I need to learn testing.

Are ADP and ACP testing the only tests required for a plan, or are there more?

Thanks for any direction.

[Guest]

ultimately, you learn by doing.

however, since plans could get audited, etc. it helps if you have a supervisor or someone who can look over your shoulder.

is there a good book? I suppose everyone has their favorite - currently mine is ERISA Outline Book by Sal Tripodi. Two big volumes. There are lots of excellent examples.

there is no such thing as a 'simple' ADP/ACP test since you can use current vs prior year testing, statutory exclusion, etc. issues like mergers and stuff make things complicated. Controlled groups as well.

other major tests include coverage testing and top heavy.

db plans require minimum participation testing.

all the power to you! it helps to have Benefits Link where you can bounce ideas off someone.

[Guest Kimberly Stewart]

It was all done by the system. If it failed testing, we juggled some things till it passed (got the employer to make an er contribution etc).

Anyway, at this interview, they asked me if I "knew" testing. I said yes, but I am not sure if the question meant to I have an understanding of what that computer is actually doing when it "runs" testing. And to be honest, I have only the vaugest idea of what it is doing. I want to understand it better. I know the top heavy rules, highly compensated, etc. but I would like to know it in more detail. I feel like this area of administration is what my "weak" spot is. I feel like I know the rest of the area so well, and I feel vulnerable out there looking for a new position with this "hole" in my understanding of plans.

I really appreciate your responding. Would the book you recommended help me? Thanks so much for your response.

Kimberly

[Guest mo again]

I agree that Sal Tripodi's book is excellent, at least on the 401(k) side.

We often start people out with the 401(k) Answer Book available through Panel Publishers. It is not as detailed as the ERISA Outline Book but is probably easier reading. One alternative, albeit a more expensive one, is attending one of the many conferences dealing with this subject. You will find many of them described on the Benefitslink "Conferences" link (click).

[Edited by Dave Baker on 08-31-2000 at 11:20 AM]

[Guest]

the Answer Book is a good start as well, however people take it to literal as far as examples go.

The one example I recall - since the ADP or ACP was above 2% indicated addind 2 to the value which was correct. however, I have talked with more than a few people who added 2 to the value even if it was less than 2%! (Rather than multiplying by 2) Yes, I know the book may say to do that, but without a second example it just doesn't click with some people.

I have nothing but admiration for someone who will at least admit they might be weak in that area - (currently looking for someone else as well and the interview process is not a lot of 'fun' at this end either. it is hard to judge just what someone knows!)

another possibility is an ASPA review course/session on C-2 if that particular session is focussed on 401(k).

[Guest Kimberly Stewart]

I checked out the books you recommended and they are so expensive. I cant seem to find a manual just on the testing end of things. I guess that does not exist?

As I looked through the chapters on the other information in the books you recommended, I have a very clear knowledge of the rest of the area of the administration side.

I checked out the conferences but there are none near me. My boss is just too busy to help me out, right now I am working for a very small TPA.

I am getting frustrated in the job search, as I am finding that very small plan administrators offer what I am looking for, which is to find a position where I have as much customer contact as I have now,and work in all other areas of administration too- but where I can delve into the compliance/ERISA area which I find so interesting (yes, I am a strange bird, and find it interesting). However, smaller firms cannot afford to pay enough. Larger firms have a "department" for everything, and I dont want to be stuck being the "5500 person" if you know what I mean. Well good luck in your hiring search, and thanks again for your help.

Kimberly

[Kirk Maldonado]

Have you considered simply reading the statute and regulations yourself? That would be the cheapest.

[Fredman]

Tom had it right with his first sentence of his first post. The best way to learn the mathematical side of the tests is to actually do some. Perhaps you can take some of the tests you ran on your system and do them by hand to see if you can come up with the same results. Also, everywhere I've been has had some sort of system to do the test, but how do you know its right? There probably isn't too many people doing testing by hand, but there is probably a bunch of us who double check what the system is calculating.

As far as your job search, I would think a TPA (smaller ones anyway) is what you want. Otherwise, try a bank (a locally owned one). Bank's do have a reputation of being on the low end of the pay scale, but there are usually some other trade-offs. Plus, if the bank is the trustee on the plans you are working on, there's an added sense of responsibility with your job.

[R. Butler]

There is a book called Tax Facts that might be a cheaper alternative to the Answer Books. I would think if you are making recommendations to the plan sponsors on how to correct tests, you probably have a good understanding of how the tests work and you may be be able to read the regulations to get a firmer grasp. Practice doing the tests manually and see if you get the same results as your administration program, That is how I learned it. There are a lot of considerations involved, but the tests are not diificult.

I don't want to sound condescending, but I would think your employer could afford at least one of the Answer Books. I work for a small firm and I know you don't get the best resource material, but how can you run a TPA firm without at least some material?

As far as the job goes, you learn alot more in a small firm just because you have to. It sounds as if you work for a very small firm. You could probably find a small to mid size firm that pays descent money and still gives you the environment you want.

Good luck.

[MR]

Howdy, Kim. Sounds to me like you've got the right attitude to be a good administrator. The idea that your employer cannot or does not supply you with reference material is kinda silly. Imagine if your clients knew!! I own a TPA firm that employs a dozen administrators (in Connecticut, if you're interested) and we have all of the reference materials the others have mentioned. For my money, Sal Tripodi's books are the best. They always seem to provide an example of the exact situation you are looking for. I suggest you make a deal with your employer. He or she shells out a couple bucks for the books and you promise to do most of your research on your own time. The other folks are right, of course regarding the "learn it by doing it" approach. The books will give you a great understanding of what you can and cannot do, but its no substitute for practical experience. Try duplicating a test in excel, for example. Anyway, get studying, before the rules change again. Good luck.