Qualified retirement plans must satisfy certain compliance and nondiscrimination requirements each year. These tests help confirm that the plan is operating within applicable IRS rules and that contributions and benefits are not disproportionately favoring highly compensated or key employees.
For many employers, compliance testing is one of the most technical and important parts of retirement plan administration. The results can affect contribution requirements, refund obligations, corrective actions, and future plan design decisions. TNJ helps clients work through this process with careful analysis, clear communication, and a practical understanding of how the plan’s provisions apply.
TNJ performs annual compliance testing based on the plan’s document, design, demographics, and contribution structure. Depending on the plan, this may include:
- Coverage testing
- ADP and ACP testing
- Annual additions testing
- Top-heavy testing
- General nondiscrimination testing
- Compensation testing
- Benefits, rights, and features testing
- Cross-testing or new comparability testing
- Other testing required based on the plan’s specific provisions
We review testing results with clients and advisors, explain what the results mean, and identify any issues that may need attention. When corrective action is required or recommended, we help clients understand the available options, timing considerations, and administrative steps involved.
Testing results can also provide useful insight beyond annual compliance. They may reveal whether the current plan design continues to support the employer’s goals, whether contribution formulas are producing the intended results, or whether changes should be considered for future plan years.
Our goal is to make the compliance testing process clear, organized, and useful for ongoing plan management. By helping clients understand both the results and the options available, TNJ supports informed decisions that help keep the plan compliant and aligned with the employer’s objectives.