Irrevocable Waiver

[Guest Mike Schwing]

An employer has a 401(k) plan - they have had an inordinate amount of employees sign a one time irrevocable waiver out of the plan prior their initial eligibility. Don't know why and I think something is fishy but that is the employer's issue.

My issue is the plan is not passing coverage of the 401(k) portion of the plan. So now I have to utlize corrective measures - i.e. an 11(g) amendment.

My question is - I assume that I CANNOT add back employees who have signed the waiver and give them a QNEC to increase the NHC coverage group benefitting under the plan (i.e. pass ratio percent test)?

I assume I am going to have to give a QNEC to the NHC who are not excluded and get the plan to pass the ABT.

Any thoughts would be appreciated.