410(b)-6f Failure

[Guest PORTE]

I have a client with a non-standard prototype and a last day of year rule. 2 eligible participants, the owner and an employee who terminates midyear with 1013 hours. The employee is not getting an allocation because of the termination but we fail 410(B). Do we need to give her a contribution to avoid the failure or is there another way out?:confused:

[Belgarath]

You need to give her a contribution. There's no other way out that I know of. If someone else does, then I'd sure love to hear it.

[Tom Poje]

yes, they need a contribution, and it must be a 'meaningful' benefit as well, so watch out if ee is zero vested!

use corrective amendment 1.401(a)(4)-11(g)

[Richard Anderson]

Does the document have "fail safe" language for failure of

410(B)? If so, you must correct by the method specified in the document.