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Maximum Elective Deferral Amounts

Ascensus Consulting is an independent third-party administrator that performs required compliance testing and non-discrimination testing for tax qualified defined contribution, defined benefit, and cash balance plans to help ensure that employers are following the rules and laws set forth by the Internal Revenue Service and the Department of Labor.

The compliance tests help verify that contributions are being allocated properly and in a timely manner. The non-discrimination tests help ensure that the plan does not discriminate in favor of highly compensated employees.

The consequences for employers that are not in compliance, intentionally or not, are severe and could include heavy civil or criminal penalties imposed by the Internal Revenue Service or Department of Labor.

The Maximum Elective Deferral Amounts Test limits the amount of elective deferrals to a plan in any year. The deferred amount is calculated based on an employee’s age and salary and cannot exceed an amount specified by the Internal Revenue Service.
Contact us for more information on compliance testing.