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Nondiscrimination Testing

Compliance

Annual tests required for 401(k) plans to prove the plan does not disproportionately favor highly compensated employees (HCEs) over non-highly compensated employees (NHCEs). The main tests are the ADP test (for deferrals) and ACP test (for matching). Safe Harbor 401(k) plans and Solo 401(k) plans with only owners/spouses are exempt from these tests.

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