The Aggregate Limit Test

If both the ADP and ACP tests do not pass the basic percentage test and both pass the alternative percentage test, the system automatically runs the new Aggregate Limit test when you run the 401(k) or 401(m) NDT report. The Aggregate Limit Test indicates that the sum of the ADP and ACP for the entire group of eligible highly compensated employees cannot exceed the aggregate limit of the nonhighly compensated group, which is the greater of:

1. The sum of 1.25 times the greater of the ADP_NHCE or the ACP_NHCE and 1.25 times the greater of the ADP_NHCE or the ACP_NHCE AND

2. Two percentage points plus the lesser of the ADP_NHCE or the ACP_NHCE, with the exception that this cannot exceed two times the lesser of the ADP_NHCE or the ACP_NHCE OR

3. The sum of 1.25 times the lesser of the ADP_NHCE or the ACP_NHCE AND

4. Two percentage points plus the greater of the ADP_NHCE or the ACP_NHCE, with the exception that this cannot exceed two times the greater of the ADP_NHCE or the ACP_NHCE.

The results of the Aggregate Limit Test appear on the new Section 401 Results page after the 401(k) and 401(m) reports have been run. If you view the Section 401 Results page before you run one or both of these reports, the Aggregate Limit Test portion of the Section 401 Results page will be blank.