ASSPA QKA 2 EXAM |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Which of the following statements regarding switching between the current year and prior
year testing method for the ADP test is TRUE?
a. A plan that is using current year testing may switch to prior year testing after 5
consecutive years of using the current year testing.
b. Switching testing methods requires approval from the IRS using Form 5300.
c. A plan that is using prior year testing may only switch to current year testing after 5
consecutive years of prior year testing.
d. Safe harbor plan years are disregarded for counting testing years.
CORRECT ANSWER
a. A plan that is using current year testing may switch to prior year testing after 5
consecutive year of using the current year testing.
A plan may switch from prior year testing to current year testing for any plan year. In
order to change from current year testing to prior year testing, the plan must have been
using current year testing for at least 5 years, or if less, the number of years since the
plan was in existence.
Question 2
When explaining to a plan sponsor the importance of the ADP and ACP tests, which of the
following statements in TRUE?
a. The tests apply only to plans with less than 100 employees because they are the ones that
tend to favor HCEs.
1
,b. The tests are used to determine if a plan is top-heavy for the plan year.
c. The tests are to ensure that plans do not unfairly benefit the HCEs.
d. The tests are optional and are only used to give data to the employer on plan
participation.
CORRECT ANSWER
c. The tests are to ensure that plans do not unfairly benefit the HCEs.
The ADP and ACP tests measure the amounts of deferrals and matching contributions to
ensure that 401(k) plans do not unfairly benefit the HCEs.
Question 3
Which of the following statements regarding prior year and current year testing methods
is TRUE?
a. A plan that uses the prior year testing method may switch to the current year testing
method in any subsequent year.
b. When using prior year testing, an employee that was an NHCE in the prior year and an
HCE in the current year is disregarded for both testing years.
c. A plan may not use the current year testing for the ADP test when using the prior year
testing method for the ACP test.
d. A plan that uses the current year testing method may switch to the prior testing method
in any subsequent year.
CORRECT ANSWER
a. A plan that uses the prior year testing method may switch to the current year testing
method in any subsequent year.
A plan is not required to use the same method for both the ADP and ACP test. A plan that
uses the prior year testing method may switch current year for any subsequent year.
When using the current year method, switching to the prior year method may only be
2
, done if the current year was used for 5 consecutive plan years or the life of the plan if
less than 5 years.
Question 4
Which of the following types of employee contributions are included in the ADP test?
a. Rollovers, QMACs, pre-tax elective deferrals, and Roth contributions.
b. Roth contributions and pre-tax elective deferrals.
c. Roth contributions, pre-tax elective deferrals, and rollovers.
d. Roth contributions, pre-tax elective deferrals, and after-tax employee contributions.
CORRECT ANSWER
b. Roth contributions and pre-tax elective deferrals.
Contributions included in the ADP test include pre-tax elective deferrals and Roth
contributions, QNECs, QMACs, and matching contributions may also be included under
certain testing methods.
Question 5
When using the early participation testing method for the ADP test, which of the following
statements is TRUE?
a. When determining the statutory employees under the early participant test, the statutory
age is 18.
b. When determining the statutory employees under the early participant testing method,
an eligibility provision of 6 months must be used.
c. Only one ADP test is performed.
d. Two ADP tests are performed; one for all NHCEs and one for the statutory HCEs.
3
, CORRECT ANSWER
c. Only one ADP test is performed.
When using the early participation testing method, a test including all the HCEs and only
the NHCEs who have met the statutory requirements is run. Those NHCEs who have not
met with the statutory requirements are not tested.
Question 6
Which employees would be in the otherwise excludable category when determining the
ADP test for 2022 when using disaggregation, based on the following information?
* The plan is a calendar year plan.
* The plan's eligibility requirements are attainment of age 18 and completion of 6 months of
service.
* The entry date is the first day of the plan year or the first day of the seventh month of the
plan year following satisfaction of the eligibility requirements.
1. PPT A | Age 19 | DOH 04/30/2020 | Entry Date 01/01/2021
2. PPT B | Age 22 | DOH 9/19/2021 | Entry Date 07/01/2022
3. PPT C | Age 32 | DOH 8/15/2019 | Entry Date 07/01/2020
4. PPT D | Age 35 | DOH 8/21/2021 | Entry Date 07/01/2022
a. Employee A only
b. Employees A and B only
c. Employees A, B, and D only
d. Employees A and D only
CORRECT ANSWER
c. Employees A, B and D only.
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VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Which of the following statements regarding switching between the current year and prior
year testing method for the ADP test is TRUE?
a. A plan that is using current year testing may switch to prior year testing after 5
consecutive years of using the current year testing.
b. Switching testing methods requires approval from the IRS using Form 5300.
c. A plan that is using prior year testing may only switch to current year testing after 5
consecutive years of prior year testing.
d. Safe harbor plan years are disregarded for counting testing years.
CORRECT ANSWER
a. A plan that is using current year testing may switch to prior year testing after 5
consecutive year of using the current year testing.
A plan may switch from prior year testing to current year testing for any plan year. In
order to change from current year testing to prior year testing, the plan must have been
using current year testing for at least 5 years, or if less, the number of years since the
plan was in existence.
Question 2
When explaining to a plan sponsor the importance of the ADP and ACP tests, which of the
following statements in TRUE?
a. The tests apply only to plans with less than 100 employees because they are the ones that
tend to favor HCEs.
1
,b. The tests are used to determine if a plan is top-heavy for the plan year.
c. The tests are to ensure that plans do not unfairly benefit the HCEs.
d. The tests are optional and are only used to give data to the employer on plan
participation.
CORRECT ANSWER
c. The tests are to ensure that plans do not unfairly benefit the HCEs.
The ADP and ACP tests measure the amounts of deferrals and matching contributions to
ensure that 401(k) plans do not unfairly benefit the HCEs.
Question 3
Which of the following statements regarding prior year and current year testing methods
is TRUE?
a. A plan that uses the prior year testing method may switch to the current year testing
method in any subsequent year.
b. When using prior year testing, an employee that was an NHCE in the prior year and an
HCE in the current year is disregarded for both testing years.
c. A plan may not use the current year testing for the ADP test when using the prior year
testing method for the ACP test.
d. A plan that uses the current year testing method may switch to the prior testing method
in any subsequent year.
CORRECT ANSWER
a. A plan that uses the prior year testing method may switch to the current year testing
method in any subsequent year.
A plan is not required to use the same method for both the ADP and ACP test. A plan that
uses the prior year testing method may switch current year for any subsequent year.
When using the current year method, switching to the prior year method may only be
2
, done if the current year was used for 5 consecutive plan years or the life of the plan if
less than 5 years.
Question 4
Which of the following types of employee contributions are included in the ADP test?
a. Rollovers, QMACs, pre-tax elective deferrals, and Roth contributions.
b. Roth contributions and pre-tax elective deferrals.
c. Roth contributions, pre-tax elective deferrals, and rollovers.
d. Roth contributions, pre-tax elective deferrals, and after-tax employee contributions.
CORRECT ANSWER
b. Roth contributions and pre-tax elective deferrals.
Contributions included in the ADP test include pre-tax elective deferrals and Roth
contributions, QNECs, QMACs, and matching contributions may also be included under
certain testing methods.
Question 5
When using the early participation testing method for the ADP test, which of the following
statements is TRUE?
a. When determining the statutory employees under the early participant test, the statutory
age is 18.
b. When determining the statutory employees under the early participant testing method,
an eligibility provision of 6 months must be used.
c. Only one ADP test is performed.
d. Two ADP tests are performed; one for all NHCEs and one for the statutory HCEs.
3
, CORRECT ANSWER
c. Only one ADP test is performed.
When using the early participation testing method, a test including all the HCEs and only
the NHCEs who have met the statutory requirements is run. Those NHCEs who have not
met with the statutory requirements are not tested.
Question 6
Which employees would be in the otherwise excludable category when determining the
ADP test for 2022 when using disaggregation, based on the following information?
* The plan is a calendar year plan.
* The plan's eligibility requirements are attainment of age 18 and completion of 6 months of
service.
* The entry date is the first day of the plan year or the first day of the seventh month of the
plan year following satisfaction of the eligibility requirements.
1. PPT A | Age 19 | DOH 04/30/2020 | Entry Date 01/01/2021
2. PPT B | Age 22 | DOH 9/19/2021 | Entry Date 07/01/2022
3. PPT C | Age 32 | DOH 8/15/2019 | Entry Date 07/01/2020
4. PPT D | Age 35 | DOH 8/21/2021 | Entry Date 07/01/2022
a. Employee A only
b. Employees A and B only
c. Employees A, B, and D only
d. Employees A and D only
CORRECT ANSWER
c. Employees A, B and D only.
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