DDahl

I would agree with Sal on the above. The participant should still be treated as being employed on his/her last day of employment. The day after the last day of employment is the first day of nonemployment and therefore the first day of participant's severance from employment. On a related topic, where do you guys land on pay in lieu of notice that is paid a few days AFTER the last day of employment? The following thread from 2016 doesn't quite resolve the question (I think because reasonable minds could differ):

Hi AlbanyConsulant. Did you ever receive an answer to your post on 1/25/23 or otherwise determine the correct course?

Hi all! We've dealt with this issue many times, often in connection with company acquisitions and have always said that a VCP is necessary given the prior EPCRS requirement that the corrective amendment benefit all participants. Now that "correction by plan amendment" has been expanded by the IRS via Rev. Proc. 2021-30 in July to eliminate the requirement that a corrective plan amendment benefit all participants, I'm wondering if folks on this thread now believe that the early inclusion failure described above can in fact be self-corrected by plan amendment. I think it is a more than reasonable conclusion. Thoughts?

Please update this thread with any unique issue in the state of TN. I work on MEWA issues regularly, often in the context of M&A. Sellers that agree to provide transition services (including benefits) for a transition period often assume the risk of a temporary MEWA. If anyone is aware of particular states going after this type of temporary MEWA, please let us know. Thanks!

Carol C - did you ever receive answers to your questions in this thread? I'm dealing with a situation where the error (failure to implement election due to misapplication of the 401(a)(17) limit) has been discovered mid-year, and I'm trying to figure out whether the full missed deferral or the 25% QNEC on the missed deferral should count towards the 402(g) limit. Counting the full missed deferral for purposes of the 402(g) limit seems not to put the participant in the same position had he or she been in had the error not occurred. It seems more reasonable to me to count only the 25% QNEC for purposes of the 402(g) limit and allow the participant to "make up" the rest of the missed deferrals in subsequent pay periods in the current year. Thoughts?