Federal regulations require a comparison of the average contribution percentage (ACP) of those classified as highly compensated employees (HCEs) to the ACP of those classified as non-highly compensated employees (NHCEs). The difference between the ACP for the two groups must be within prescribed limits or corrective action is required. We repeat this process for the average deferral percentage (ADP) in 401(k) plans.
CNT Basics
2007 CNT (Red Folder)
Projection CNT or other 2008 Data (Blue Folder)
CNT Basics
Use this to remind highly compensated employees to delay their income tax filing until the completion of your plan`s CNT.
Contribution Nondiscrimination Testing Administrative Manual Chapters
Find all the details of every aspect of the testing process.
If you`ve ever been confused about the differences between Contribution Nondiscrimination Testing and the Top Heavy Testing, this document will clarify the differences.
A Qualified Nonelective Contribution (QNEC) is sometimes used as a corrective measure to bring a plan into compliance. This fact sheet explains the ins and outs of QNECs. If you are interested in making a QNEC, you should contact the NADART Plan Information Center at (800) 462-3278 or e-mail nadart@nada.org as soon as possible.
Identifying Highly Compensated Employees
Confused about what employees are considered highly compensated? The two-part instant training presentation available on our pre-recorded training page will help you identify them.
Explains to a highly compensated employee why they are getting a refund check.
2007 CNT (Red Folder)
If your plan is tested using either the current or prior year testing method, you will receive a red folder with test results.
If you need a quick summary of the CNT testing process, this is the document for you.
If you have questions about the different testing methods, this document will clarify the differences.
Adjustment Worksheet
The Adjustment Worksheet is included in your testing package, but use this document if you need to add a second page.
Projection CNT (Blue Folder)
If your plan is tested using the prior year testing method, you will receive a blue folder with projection test results. If your plan is tested using the current year testing method, you will receive a blue folder containing preliminary identification of your highly compensated employees for the 2008 plan year.
Projection CNT 401(k) Adjustment Worksheet (pdf)
The Projection Adjustment Worksheet is included in your testing package, but use this document if you need to add a second page.