401(k) Plan Mega Roth Backdoor After Tax Contributions

[VIkram Aurora, QPA, QKC]

Hi, I've worked on 401k plans for a while now, but encountered mega roth backdoor quite recently. I do understand that it has great tax saving for an individual but after digging deeper I read that ACP must be passed for the after tax voluntary contributions even if the plan is safe harbor and passed ADP and ACP for matching. Am I understanding this correctly? Also is there any way to bypass the testing for mega roth backdoor after tax contributions?

Thanks!

[John Feldt ERPA CPC QPA]

Am I understanding this correctly? Yes.

Is there any way to bypass the testing for mega roth backdoor after tax contributions? Have zero eligible nonhighly compensated employees, no testing needed. In other words, employing only highly compensated employees who meet the age/service/entry requirements = no testing needed. 

[CuseFan]

Exactly, this is either an owner-only play or may work in a very large plan that otherwise easily passes ACP testing, but is essentially a nonstarter in small plans that cover NHCEs.

[VIkram Aurora, QPA, QKC]

Thank you!

[austin3515]

I have had it where it was an NHCE who wanted to do it.  It was a married couple, and the NHCE was married to someone who made a gazillion dollars so they were looking to contribute the full 415 limit.  And the plan sponsor was willing to accommodate (small employer).