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Employee Benefits > Actual Contribution Percentage Test (ACP)
The following information is about Actual Contribution Percentage Test (ACP).
Actual Contribution Percentage Test (ACP) Defined
A test applicable to 401(k) plans and other plans with employer matching contributions (and employee after-tax contributions) which works to limit the average rate of employer matching contributions (and employee after-tax contributions) made for the benefit of highly-paid participants in relation to the average rate of employer matching contributions made for the benefit of lower-paid participants.
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