414S Nondiscrimation test

[Guest kangerooster]

I am trying to find guidance and looking to you for help!

If a plan fails 414S because of the exclusion of bonus from compensation, how do you correct it. Is the bonus added back in for the NHCE group only or for everyone? I can't seem to find anything in black & white to help me.

Appreciate your input.

[AndyH]

First, see if your document tells you what to do.

Second, consider doing the 401(a)(4) general test.

Third, do a corrective amendment in accordance with 1.401(a)(4)-11(g). You need to add something here, not take something away.

You could incrementally add contributions so that everybody gets a uniform allocation including bonus.