The plan document is the instruction manual for the allocation. A favorable testing result does not rewrite the adopted formula.
Collect the complete document package
Start with the current adoption agreement, basic plan document and all amendments. Include the current summary plan description and any relevant employer resolutions or allocation instructions. A single old PDF may not show the provisions that are effective for the year being modeled.
Identify the plan year and which document version governs it. Do not assume the newest document automatically applies to a prior-year contribution.
Five provisions that change the answer
| Provision | Question to answer |
|---|---|
| Allocation formula | Pro rata, age-weighted or permitted new comparability groups? |
| Compensation | Which pay and participation period count? |
| Eligibility | Who enters each contribution component, and when? |
| Allocation conditions | Are hours or last-day employment conditions applicable? |
| Safe harbor and vesting | What is already promised, and how does it vest? |
Ask the provider to identify the relevant section or election, not just say the document “supports profit sharing.”
Example: testing cannot override a pro rata formula
Suppose a model gives the owner 15% and employees 5%. If the operative document requires everyone to receive the same percentage, a passing nondiscrimination illustration would not authorize those different allocations.
The implementation question is whether an appropriate amendment is available for the intended year, when it must be adopted and effective, and who will prepare it. The answer cannot be supplied by the allocation table alone.
Coordinate before instructing a contribution
Have the document provider confirm any required amendment and applicable timing. The employer, TPA and recordkeeper should agree on the final allocation file, prior funding and remaining contribution. Keep those confirmations with the year’s testing records.
Amendment, funding and deduction deadlines are different concepts. Do not treat a tax-return extension as blanket permission to change every plan provision after year-end. Ask about the specific change and year rather than relying on a generic deadline.
Explore the next step
Try the free scenario calculator with hypothetical inputs, or compare more allocation examples. The methodology guide explains what the calculator does and does not test.
Sources & further reading
- Treasury Regulation §1.401-1: qualified plan requirements
- Treasury Regulation §1.401(k)-3: safe harbor requirements
- IRS: choosing a profit-sharing plan
Educational content updated September 18, 2026. Examples are fictional; they illustrate funding choices and do not constitute final testing or plan-specific advice.