QNEC for improperly excluded employees

[Guest erisamelissa]

We have a client that discovered that several eligible employees were improperly excluded from the plan. This discovery happened during the existing plan year, and the employer intends to make QNECs for those improperly excluded employees. The question was raised, and I'm surprised I haven't seen it before, is do they need to amend their plan to provide for corrective QNECs? There was an earlier thread that dealt with this issue in the ADP context (i.e. if the method of correction provided for a QNEC to be made, and the plan, as currently drafted, did not allow for QNECs to be made, that the plan could be amended to allow for a correction by QNEC - from the EPCRS Rev. Proc).

I'm not really sure that this is a comparable - I've never seen a 401(k) plan that contains language that says "in the event of an operational failure, the plan sponsor may make contributions to the plan to correct such failure".

I thought I'd throw it out there and see what sticks.

Much obliged.

[Guest taxesquire]

if it's a prototype plan, it probably provides for this, so I'd check it again before doing an amendment. If it's not in there, then I think you should do the amendment.

[Guest erisamelissa]

if it's a prototype plan, it probably provides for this, so I'd check it again before doing an amendment. If it's not in there, then I think you should do the amendment.

Thank you for the response. It is not a prototype, and we are planning on adding the language, but I thought I would check out what the community thought.