ECPRS / Did Not withhold Elected Amount

[austin3515]

Question:  HCE's 403b/match was miscalculated.  So we under-withheld for a period of 18 months or so. The Plan has a matching contribution too, and pursuant to EPCRS we are contributing the match he missed as well.

The question is: How does this affect the ACP test?  if you haven't already guessed, we historically have testing issues.  I read through EPCRS and it does not mention this at all. Do we need to back and run ACP testing?  Do we include in the current year ACP test? Or do we just not do anything because, hey, I corrected in accordance with EPCRS.

[John Feldt ERPA CPC QPA]

Revenue Procedure 2016-51, Appendix A, Section .05(5). It says first to make sure that any "missed deferral" plus all the actual deferrals made for the year, when combined, are not exceeding 402(g) limit, would not cause a violation of the 415 limit, and does not go over any other plan limit. You can't calculate the missed match on amounts that could never have been deferred in the first place.

Next look at .05(5)(d). Here it says how to handle ADP/ACP testing. If the plan also failed the ACP test, the correction above can't be used until after the ACP test is corrected. It then states the plan may rely on an ACP test done with respect to the employees that were not impacted by the failure to implement the deferrals properly, and may disregard employees whose elections were not properly implemented.

Take a look at it and see what you think.

[austin3515]

Interesting though because it makes it sound like I can use a free pass on testing since this was the only HCE in the Plan.  If I can disregard anyone effected by this failure, I can disregard my only HCE. 

Sometimes I wish they would just write this stuff in plain English.

[austin3515]

Because the match goes in as a nonelective contribution, do I need to be concerned with 401(a)(4)?  I can't find anything in there talks about there being no need to test the corection itself for nondiscrimination.