failure to implement automatic deferral provision 5500

[R. Butler]

Plan sponsor failed to implement the automatic deferral provision in 2009. Just noticed the error today. Does this affect answers to the compliance questions to the Sch. H? I don't see that it is a failure to transmit participant contributions (4a); it is a failure to withhold altogether. The other possible question I see is 4l, but it is my incllination that a failure to pay a benefit when due refers to a failure pay a disitribution and doesn't relate to this issue.

Thanks in advance for any guidance.

[Lou S.]

You don't have a problem with the Form 5500 for this issue.

You do have a compliance issue though that should be corrected through EPCRS; I believe a QNEC of some sort to the people who were not auto enrolled is the correction method the IRS wants.

[R. Butler]

Thank you for your reply. They will correct either through SCP or VCP depending on whether they had procedures in place that just weren't followed. We just wanted to verify that we weren't supposed to report it somewhere on the 5500. The auditor is also researching whether it should be inluded in the audit report.

Thank you for your reply.