But I forgot...

[SoCalActuary]

The plan sponsor forgot to make their SH contribution within the 12 months after the plan year end.

They made proper notice before the 2008 year began that a 3% SH NEC would be made.

Now we are in 2010 and the plan failed to make the payment by 12-31-2009.

My read is that you cannot go back to ADP testing for this. Further, you cannot correct a failed ADP.

Does this become a DOL issue? Qualification issue? Fiduciary breach?

I don't know where we would even report this failure on either the 2008 or 2009 5500 forms.

I am thinking of proposing that this be a voluntary correction with interest from 12-31-09 to date of deposit.

Ideas?

[Kevin C]

If the document contains the SH provisions, then you have an operational failure. It should be covered in Rev. Proc. 2008-50 under Self Correction of a Significant Operational Failure in Section 9.

You may not be able to treat 12/31/2009 as the due date for the 2008 SH contribution. Most documents have a provision that says employer contributions are due by the due date for the tax return including extensions thereof. If your document has similar language, the due date is likely earlier than 12/31/2009.

[Tom Poje]

my guess, being that the self correction is you put in the contribution with interest calculated from the due date.