Why does NADART primarily use the prior year testing method?
The prior year testing method virtually eliminates the guess work from determining the allowable contribution for your highly compensated employees in a given year. The NADART Contribution Nondiscrimination Test Projection provides the percentage limitation for your highly compensated employees. You are able to compare the limit to their contribution and deferral percentages and you know before the end of the year whether any highly compensated employees can expect refunds. If you have any questions about this process and how to use it for the advantage of your highly compensated employees, you may contact our Plan Information Center at (800)462-3278 or e-mail us at nadart@nada.org.
