Most retirement plan sponsors are familiar with the plan testing that takes place around this time of year. With acronyms like ADP, ACP, HCEs, and NHCEs, the technical side of 401(k) nondiscrimination testing can easily become overwhelming. There are a variety of plan tests performed each year and there are several different ways to take action should the plan fail testing. Among options to consider, corrective distributions from the plan or adding additional money to certain parts of the plan may be advised.

This annual testing cycle can be very time consuming and frustrating, and we understand our clients’ concerns: Corrective action may be complicated and the IRS may even levy penalties if corrective action is not taken in a timely manner.

At SIMA, our clients benefit from plan testing reviews during their annual plan meetings. But if you’re not a current client, or we don’t manage your retirement plan, you may seek consulting services by our team, too. We welcome the opportunity to perform a comprehensive plan review and consult with you on alternative plan design to your minimize your likelihood of failing discrimination tests in the future. Quality educational support, proactive communication, and ongoing review of the plan’s investment will benefit your employees while we help to enhance your plan and overall participant experience.

SIMA Retirement Solutions, LLC is able to offer several angles of approach to resolve testing issues for the longer term, helping to alleviate the tension of annual testing if testing failures are a threatening or reoccurring event for your company’s plan. Along the way, we may perform an evaluation of your plan’s fees and service providers which should always be considered, especially as a plan matures. All plan sponsors should seek full transparency of their plan’s expenses – we consistently strive to provide just that. An analysis of your plan may provide insight that can guide your decision making for the future. Our goal is always to ensure the clients’ best interests are paramount, and that the service standard exceeds expectations.

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