Is it possible for a plan to run their 401(m) coverage test disaggregated but their ADP test aggregated?

It is indeed possible for a plan to run their 401(m) coverage test disaggregated while running their ADP test aggregated. This approach allows the plan to evaluate specific groups of employees independently regarding eligibility and contributions, while still maintaining an overall combined approach for the Actual Deferral Percentage (ADP) test.

Disaggregating the 401(m) coverage test can help ensure compliance with coverage requirements on a more granular level, providing flexibility in how different categories of employees are treated for contribution purposes. Meanwhile, aggregating the ADP test allows for a more holistic assessment of employee contributions across all eligible participants, which can sometimes yield more favorable outcomes for a plan.

Therefore, the option affirming that this combination of testing methods is allowed is correct, as it provides plan sponsors with strategic options in compliance testing to meet the specific needs and demographics of their workforce.