Common use of Current Year Testing Clause in Contracts

Current Year Testing. If no election is made by the Employer in the Adoption Agreement, or if so elected by the Employer in the Adoption Agreement, the ACP limits in (1) and (2), above, will be applied by comparing the current Plan Year’s ACP for eligible Participants who are Highly Compensated Employees for the Plan Year with the current Plan Year’s ACP for eligible Participants who are Non-Highly Compensated Employees. Once made, the Employer can elect Prior Year Testing for a Plan Year only if the Plan has used Current Year Testing for each of the preceding five (5) Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code Section 410(b)(6)(C)(i), the Employer maintains both a plan using Prior Year Testing and a plan using Current Year Testing and the change is made within the transaction period described in Code Section 410(b)(6)(C)(ii).