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Anyone have experience with an IRS audit or a citation on what are facts and circumstances around providing the 'effective opportunity' for a participant to defer? Hypothetically: we have a client who will sign a new plan document with SH basic match on 9/30/19. The recordkeeper chosen by the client has previewed that it will likely take 60 days to set up the new plan and to provide enrollment materials to the participants. So the participants will likely only have 1 month of match. Of course the owner will max out. So the plan will be in existence for 3 months, but... Again, i'd really appreciate anyone who's been challenged by the IRS on this point (if anyone!), or if you have a citation that says more than "Whether an employee has an effective opportunity is determined based on all the relevant facts and circumstances" 1.401k-1(e)(2)(ii) And i don't think this is an EPCRS issue, as the reason for the Employee Elective Deferral failure is NOT due to the plan improperly excluding anyone. EPCRS App A .05(10) Anybody??

Facts: 401k Safe Harbor with Profit Sharing Plan (cross tested plan design) the 3% non-elective Safe Harbor is provided to NHCEs only Calendar Year Plan payroll is monthly professional staff, mostly HCEs, a few age 50+, many less than age 50 2 employees who are HCEs, elected the maximum 401k+catch-up, 1 of whom unfortunately passed away early in the year payroll vendor changed starting with April 2015 payroll all prior 401k+catch-up amounts were accounted for with change by new payroll vendor (error is not because of this). Error: HCE (age 50+) elected BOTH the maximum 401k deferral be withheld proportionately from each pay for the 2015 Plan Year ($1,500 per pay) AND the maximum catch-up be withheld proportionately from each pay for the 2015 Plan Year ($500 per pay). Total per pay withholding $2,000, representing deferral + catch-up. In addition this participant elected 100% of any bonus pay be withheld up to the maximum limits permissible. As it turned out for 2015, the only bonus pay was late December (no deferral was withheld). $2,000 deferral + catch up amount was withheld from monthly pay January through September (old payroll vendor and new payroll vendor). Starting with October's pay, the payroll vendor ceased withholding the $2,000 amount, and this continued through December 2015 (3 months). A late December bonus was paid but no deferral was withheld. Total missed deferral and catch-up: October 2015: $1500 deferral and $500 catch-up November: same December: same Total $4,500 deferral and $1500 catch-up Starting January 2016, the same withholding recommenced $1500 401k deferral + $500 catch-up (2016 limits unchanged) and are to this date continuing. Questions: 1. Given the withholding recommenced within 3 months is there a correction necessary, given the recent IRS new correction methods announced to avoid "windfall" to employee receiving full compensation and contribution? 2. If correction is necessary, is the catch-up amount included in the correction of missed deferrals, i.e. a corrective contribution is made for missed catch-up? 3. Is there any way to recharacterize the contributions totaling $18,000 (withheld as $1500 401k * 9 = $13,500, and, $500 catch-up *9 = $4500) that were made as $6,000 catch-up, $12,000 401k deferral? In this way the employer PS contribution can be maximized, assuming passes n/d testing, and the overall total maximum to this participant still achieved... in a good faith effort to make the participant's total annual additions for the year "whole." Thank you

A fiscal plan (5/31PYE) with Safe Harbor Match, pre-tax 401k The employer rehired a former participant on 9/1/2015. This participant was not paid his VAB in the period between former termination date and rehire, and has numerous past service years to his credit. Based on plan terms, this participant was eligible immediately upon rehire. In the past, this participant did contribute 401k deferrals. Upon his rehire, the employer failed to provide the SH Notice and 401(k) Deferral Election Form. The Plan determines the SHM on an annual basis, therefore, the Participant could "increase" his 401k amount for the remainder of the Plan Year so as to capture the full SHM. Upon discussion of this matter, the Participant has told the employer he does wish to make 401k deferral contributions to the Plan. What is the correction necessary for the period 9./1/2015 to date? Thank you.