Missed Deferral

[Nassau]

My client has identified several Participants that were never enrolled in the plan, and require a QNEC to correct the missed contributions dating back from 2009. However, they have set them up in our Recordkeeping system in the meantime, and intend to have them go through the automatic enrollment process (QACA).

My client is stating that the Participants should be enrolled at 4% rather than the normal 3% automatic enrollment. They feel that this is necessary since the Participant would have experienced a 1% automatic increase in January 2010. However, they are also asking if they should be given the 30 day opt out period, or if they should be manually enrolled immediately at 4%.

Question: Is the automatic enrollment at 4%, is that the correct method for the QNEC plus earnings ?