MNO

A participant was deferring prior to a leave of absence without pay. Participant was on leave from April 1 to June 30th. Employer forgot to resume participant's deferrals after participant returned to the company. Is the corrective deferral from July 1 through December 31 based on the participant's original deferral election or 50% of the participant's deferral election.

Plan has SH3% non-elective, discretionary match and an excess- integrated PS contribution formula. Plan is top heavy. Working with a McKay Hochman document and Relius software My understanding is that; the SHNEC satisfies the top heavy requirement for the plan but it cannot be used to satisfy permitted disparity. the Discretionary Match contribution can be used to satisfy the 1st tier of the Excess Integrated Allocation Formula. In Relius, I ran Deferrals, SHNEC, Discretionary and Match contributions. All but two participants deferred at least 6%. Those two participants did not defer a all during 2016. and were employed as of 12/31. Ran a PS contribution, expecting to see that first 3% of PS contribution was allocated to the two participants who did not defer but that didn't happen. It appears that Relius used the 3% SHNEC to satisfy the first step of the excess integrated PS formula. Those with earnings over the taxable wage base received the appropriate allocations and the remaining PS contribution was pro-rata. Shouldn't those two employees have received 3% first, according to the formula. I used the top-heavy first, not top-heavy skim method for allocating the PS contribution. Is my understanding of how the SHNEC can be used incorrect or have I coded the Relius specs incorrectly or is there a limitation in the Relius software that won't permit this transaction without a work-around? Help!

Thank you, Mojo and hr for me.

Does ERISA permit new plan loans to terminated participants who have remaining account balances? Can you provide the code section if ERISA addresses this topic.