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January begins annual testing for 401(k) plans to ensure that they are in compliance with important Internal Revenue Code requirements. You should have received an email from abaretirement@phmurphyandcompany.com on or about January 10, 2019, asking if you would like to take advantage of compliance services offered by the ABA Retirement Funds Program’s (“the Program”) compliance services, including nondiscrimination testing and employer contribution calculations.

How do I take advantage of the Program’s Compliance Services?

Once your information and the completed form are received, the compliance team will conduct the tests and notify you of the results. If any compliance issues are identified, you will be notified of any corrective measures your plan may need to take to address the issues. Generally, upon receiving the census information in good order, tests and/or contribution calculations are returned to you via encrypted email within 15 business days, if you meet the deadline for returning these items (February 11). Requests received in good order after February 11 will be returned to you within 20 business days.

The Program’s compliance testing and contribution calculation services are offered to clients at no additional cost. For more information on compliance testing, please visit the online Plan Administrator Guide at www.abaretirement.com/ePAG and see the section called “Compliance and Communications.”

NOTE: If you sponsor a 401(k) plan intended to meet the safe harbor requirement in 2018, nondiscrimination testing is generally not required due to safe harbor regulations.

What is the census for?*
The census helps the Program gather information needed to act on certain requests, such as:

  • 401(k) plan nondiscrimination testing (if applicable)—Non-safe harbor 401(k) plans are required to perform average deferral percentage (ADP) and average contribution percentage (ACP) testing annually.
  • Contribution calculation—The Program can assist plan sponsors with calculating their employer contributions.
  • Top-heavy testing—The Program will provide testing to determine if the plan is top-heavy (meaning 60% or more of the total plan assets are held by “key” employees) and instruct plan sponsors on the proper remedy.

What do I need to do next?
Detailed instructions are provided in the email sent to you on or about January 10, 2019 noted above (or in a letter if we do not have your email address on file). If you request a nondiscrimination test and/or a contribution calculation please make sure to:

  • Respond to the email or submit the 401(k) Nondiscrimination Testing and Contribution Calculation Request Form.
  • Submit the Employee and Contribution Census by February 11 after receiving it via email from the Program.
    • If you have not previously provided the Program with a participant’s termination date or the hire or rehire date for your newly eligible employees, use the census to do so and highlight or bold the date.
  • If you have made a “Top Paid Group” election in your adoption agreement, complete and sign the Top Paid Group Worksheet provided in the email previously mentioned.

*Compliance testing is complicated. If you are not sure whether you need to participate, please call 800.752.6313. Representatives are available to answer questions and assist you in completing the census.

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