Running the 401(k) Discrimination Results Program (R083675)
Select Government Reporting menu (G05BG), Nondiscrimination Reporting. On Non-Discrimination Testing Process, select Run Pass/Fail Test Report from the Final Pass/Fail Test Processing and Review section.
After you run the tests to determine key employees and the test that accumulates the results of all previous tests for the current year (ADP/ACP), you run the 401(k) Discrimination Results report (R083675) to determine compliance with governmental regulations for qualified plans.
The 401(k) Discrimination Results report (R083675) performs two tests. In the first test, the ADP and ACP of the NHCE is multiplied by the multiplier that you entered in the first processing option. If the ADP and ACP of the HCE is less than the result, the organization passes the test, and the report indicates that the HCE are not overly contributing to a 401(k) plan.
If the first test fails, the system initiates the second test. This test has two parts. To meet the government requirements for NDT, the organization must pass both parts of the second test.
The first part of the second test multiplies the ADP and ACP of the HCE by the multiplier that you entered in the second processing option. If the ADP and ACP of the HCE is less than the result, the report results indicate that the HCE are not overly contributing to a 401(k) plan.
The second part of the second test adds the ADP and ACP of the nonhighly-compensated group to the factor that you entered in the third processing option. If the ADP and ACP of the HCE is less than the result, the report results indicate that the HCE are not overly contributing to a 401(k) plan.
Data selection for this Final Pass/Fail test must be based on the ADP/ACP test for the test year when using the Current Year Testing Method. However, when running this test using the Prior Year Testing Method, data selection should be based on the test name specified in the prior year testing method program (P083675). For example, a test name may be PRIOR05.