True or False: Elective deferrals shifted to the ACP test are included in the 401(m) coverage test.

Elective deferrals that are shifted to the Actual Contribution Percentage (ACP) test are not included in the 401(m) coverage test. The reason for this is that the coverage test is designed to assess whether the plan meets the non-discrimination requirements concerning contributions made on behalf of employees, specifically relating to matching contributions and employee contributions.

The ACP test measures the percentage of contributions made by highly compensated employees (HCEs) compared to non-highly compensated employees (NHCEs), focusing specifically on employer contributions and additional employee contributions that match those employer contributions. Since elective deferrals do not factor into the ACP test when considering the coverage test, they do not impact compliance in that context.

The other options suggest conditions or variations that do not change the fundamental principle that elective deferrals do not play a role in the coverage test. Therefore, the answer is accurately identified as false, as it reflects understanding of how the various tests interact with different types of contributions within a 401(k) plan.