The Actual Deferral Percentage ADP test is one of the tests

The Actual Deferral Percentage (ADP) test is one of the tests that some qualified plans must comply with. Which of the following plans must generally comply with the ADP test?

Profit-sharing plans.

Safe harbor 401(k) plans.

a. 1 only.

b. 2 only.

c. Both 1 and 2.

d. Neither 1 nor 2.

Solution

safe harbor 401l plans are out of the test. hence profit sharing option plan is the one which is subject to this test in the options given.

Hence option a. 1 only is correct