Practical Law Glossary Item w-019-8906 (Approx. 2 pages)
Glossary
Actual Contribution Percentage (ACP) Test
An annual nondiscrimination test for 401(k) plans that measures whether employer matching contributions and employee voluntary after-tax contributions discriminate in favor of highly compensated employees (HCEs). Savings Incentive Match Plan for Employees 401(k) Plans (SIMPLE 401(k) plans) and safe harbor 401(k) plans are not required to perform the ACP test.