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Showing results for tags 'What if all NHCEs Excluded'.
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We're looking at a potential takeover in which HCEs have been allowed to defer but none of the eligible NHCEs were offered the opportunity to defer. As a result, the NHCE's ADP is 0% Appendix A Section .05(2) of Rev Proc 2013-12 calls for a contribution equal to the "missed deferral opportunity"; defined as 50% of the actual deferral percentage. The employer can argue that the ADP is 0%, and therefore 50% of 0% is 0. However, in this case, the employer created the 0% ADP. It seems he should not be allowed to benefit from the wholesale exclusion What is a reliable correction under these facts? Should we assume there is a minimum 3% ADP? Your feedback is much appreciated.