EPCRS program

[Belgarath]

I'm going to tell this client to consult an attorney, but I'm curious for my own information. Client has both a money purchase and a profit sharing plan. 3 HC's, currently no NHC's. In 1994, they had a NHC who was a participant. Their certified census data for 1994 said the NHC terminated employment.

Lo and behold, it now turns out that this wasn't true. Don't have the details yet, but it appears that at that time, they shifted employee over to some sort of leasing organization, but continued to employ him full time. NO contributions were made for him in 94-97, when he did actually terminate employment.

My best guess is that this would have to be handled under VCP. (took me 20 minutes to figure out which letters went with which correction program - changed a lot since I last looked!) Possibly under VCO, but I'd be concerned that this would be considered an "egregious" failure. Any opinions on this? Also, since contributions under the money purchase plan were missed, will the client have minimum funding penalties as well?

Thanks in advance for any opinions you might have.