Employee Plans Compliance Unit (EPCU) – Current Projects – Single Account 401(k)

Why did I receive an EPCU compliance check letter?

Our Form 5500-series return records show that while your 401(k) plan has more than one participant, there is only one participant with an account balance in the plan.

What is EPCU attempting to determine?

The Employee Plans Compliance Unit (EPCU) wants to understand how your retirement plan meets the nondiscrimination requirements of IRC section 401(k)(3) and if our records reflect accurate information.

What actions do I need to take?

Please complete the information request. You may also furnish any other documents or clarifying material that you believe will be helpful for us to review. You should make every effort to be as complete and accurate as possible in your responses and respond by the due date.

If you need additional time, make sure to contact the EPCU representative (located on the letter) to request an extension. Failure to provide the information could result in further action or examination of your plan.

If You Have Questions

Feel free to e-mail us and we will be glad to answer any questions you have about the project and how it relates to your situation. Please include “Single Account 401(k)” in the Subject line of the message. You may also telephone, fax or e-mail the contact person listed on the letter. Please note that we will not respond by email. As such, please provide a phone number where we can reach you.


IRC section 401(k)(3) provides nondiscrimination testing for 401(k) plans, the Actual Deferral Percentage Test. The ADP test is a mathematical test allowing for a specified variance between average deferrals of Highly Compensated Employees (as defined in the Code) and Non Highly Compensated Employees (as defined in the Code). The deferrals of HCEs are thus limited by non HCE deferrals.

The Code does provide exceptions to the nondiscrimination requirements in the form of a Safe Harbor Contribution under IRC section 401(k)(12). The Safe Harbor contribution must follow the formula and notice requirements as set forth in the Internal Revenue Code.

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