ADP TESTING LIMITATIONS Clause Samples
The ADP Testing Limitations clause defines the boundaries and restrictions on how Automated Data Processing (ADP) systems or components may be tested within the scope of an agreement. Typically, this clause specifies which types of tests are permitted, such as performance or security testing, and may restrict testing to certain environments or require prior approval before conducting tests. By setting these parameters, the clause helps prevent unauthorized or potentially disruptive testing activities, thereby protecting system integrity and ensuring that testing does not interfere with normal operations.
ADP TESTING LIMITATIONS. PRIOR YEAR TESTING - If elected by the Employer in the Adoption Agreement, the ADP for a Plan Year for Participants who are Highly Compensated Employees for each Plan Year and the Prior Plan Year's ADP for Participants who were Non-Highly Compensated Employees for the Prior Plan Year must satisfy the basic limit set forth in (1) or the alternative limit set forth at (2):
ADP TESTING LIMITATIONS. (a) PRIOR YEAR TESTING - If elected by the Employer in the Adoption Agreement, the ADP for a Plan Year for Participants who are Highly Compensated Employees for each Plan Year and the Prior Plan Year's ADP for Participants who were Non-Highly Compensated Employees for the Prior Plan Year must satisfy the basic limit set forth in (1) or the alternative limit set forth at (2):
(1) The ADP for the Plan Year for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Prior Plan Year's ADP for Participants who were Non-Highly Compensated Employees for the Prior Plan Year multiplied by 1.25; or
(2) The ADP for a Plan Year for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Prior Year's ADP for Participants who were Non-Highly Compensated Employees for the Prior Plan Year multiplied by 2.0, provided that the ADP for Participants who are Highly Compensated Employees does not exceed the ADP for Participants who were Non-Highly Compensated Employees in the Prior Plan Year by more than two (2) percentage points.
(b) For the first Plan Year of a Plan, where the Plan permits a Participant to make Elective Deferrals and the Plan is not a successor Plan, for purposes of the foregoing limits, the Prior Plan Year's Non-Highly Compensated Employees' ADP shall be 3%, unless the Employer has elected in the Adoption Agreement to use the current Plan Year's ADP for these Participants.
ADP TESTING LIMITATIONS