During the 1998 plan year, the ADP for NHCE's was 1.73% and the ACP was 2.34% As the matching contributions are 100% vested, the plan administrator could have prepared a single ADP test showing a combined ADP for NHCEs of 4.07%. If the employer uses the prior plan testing method, does this mean that for the 1999 plan year, HCEs can have an ADP of 6.07%? Any planning opportunities? Thanks. Ed

In order to use the matching contributions in the ADP test, the matching contributions must satisfy the requirements of a Qualified Matching Contribution (QMAC).