You must be using the Benefits Integration component with US Payroll to perform this test. Payroll results must be available in the system for your selected test population. Also, all Benefits plan data must have been maintained in the Benefits component.

There are two selection screens for the 401(k) nondiscrimination test report:

1. General Information
2. Tests

This procedure describes how to make selections and execute the 401(k) nondiscrimination test.

1. Select System-> Services-> Reporting.
2. Enter program RPSBENU1.
3. Execute the program. The Benefits: 401(k) Non-discrimination Testing selection screen for General Information appears.

1. In the Date Selection area of the first (General Info) selection screen, enter the plan year to be tested (required). The default is the year prior to the current system year.
2. The report automatically uses the information from Box 1 of the W-2 Federal Tax and Wage Statement form. Box 1 uses the last payroll result of the testing year as the compensation to be used in testing. You can customize this compensation by including and/or excluding additional wage types in the Define Compensation Adjustment area.
3. In the Choose Benefit Plan(s) for Testing area, enter the benefit area and benefit plan(s) to be tested. (This is a required field when you run nondiscrimination testing. It is optional when you are simply identifying HCEs.)
4. To automatically run all tests necessary to determine whether chosen plans qualify for tax exemption, select Perform All Necessary Tests. Do not select it if you want to run tests individually on subsequent screens.

1. Enter the minimum annual taxable compensation your company uses to define HCEs for the testing year selected. This is a required field in the first (General Info) selection screen.
2. Select a method for determining HCEs. You can use either of two methods:

• The first method includes employees who own at least 5% of the company, or whose compensation exceeds the minimum annual taxable compensation you defined in the previous step
• The second method includes the top 20% of employees whose compensation exceeds the minimum annual taxable compensation you defined, plus those employees who own at least 5% of the company (but whose compensation is below that of the top 20% of employees)

• Select General Exclusions As Permitted By Law, for a list of some exclusionary categories. Choose all applicable categories.

• Exclude by criteria entered in the Master Data Exclusion area.
• Exclude by criteria entered in the Benefit Data Exclusion area.

1. In the Update Database area in the first (General Info) selection screen, select either to:

· Run the test as Testing Only, Do Not Update. This is the default.

· Allow the program to update the HCE indicator in the HCE Information infotype (infotype 0375), using a batch-processing session, by selecting Batch Input Information.

2. If you did not choose Perform All Necessary Tests on the General Information screen, you may perform the Ratio Percentage Test and/or Average Benefit Test. To run these tests, choose Tests from the application toolbar to access the second selection screen. If you chose to perform all necessary tests or run the Ratio Percentage Test, check to see whether you can exempt certain employees from ratio percentage testing. There are two places where you can identify these employees as exempt:

· On the second (Tests) selection screen, choose General Exclusions As Permitted By Law for a list of some exclusionary categories. Choose all applicable categories.



If you choose Have Not Completed 6 Months of Service, then you must also enter the Date Type Indicating First Day Of Work, and you must maintain the Date Specifications Infotype (Infotype 0041) for that date type.

If you choose Have Terminated, then you must also enter the Date Type Indicating Last Day Of Work, and you must maintain the Date Specifications Infotype (Infotype 0041) for that date type.

· Exclude by criteria entered in the Master Data Exclusion area of the second (Tests) selection screen.



3. If you chose to perform all necessary tests or run the Average Benefit Test, and if the benefit plan(s) you are testing are designed to integrate with Social Security, then you may enter the appropriate Social Security Wage Types to include in the testing.
4. Enter the Maximum Annual Compensation value appropriate for the testing year selected previously. This is a required field in the second (Tests) screen.
5. If you did not choose Perform All Necessary Tests on the General Information screen, you may select and run the Actual Deferral Percentage (ADP) Test and/or Actual Contribution Percentage (ACP) Test.

· If you chose to perform all necessary tests or run the ADP Test, then you may select certain contributions to include in the testing.

· If you chose to perform all necessary tests or run the ACP Test, then you may select certain contributions and/or an elective deferral or to include in the testing.

6. Select Execute to run the test(s).

The program outputs a list screen containing the test results. It also provides additional information about the testing population and the HCEs. You can save this list to a local file, or print it.