Actual Contribution Percentage (ACP) Test | Practical Law

Actual Contribution Percentage (ACP) Test | Practical Law

Actual Contribution Percentage (ACP) Test

Actual Contribution Percentage (ACP) Test

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.