NHCE received overstated contribution

[dmb]

Employer has a service based allocation schedule that satisfies the smoothly increasing gateway. A NHCE's allocation was made based on servcie without regard to a break in service so the participant recieved too much of an allocation. This is for a 2010 calendar year allocation. My questions are: when performing the avergage benefits test should the actual allocation be used or the correct allocation be used (the allocation has not yet been corrected)?? Also, does the incorrect allcoation impact the smoothly increasing status?? Thanks.

[Jim Chad]

This is an operational failure and the Participant should get exactly what the document says. So I would correct it first and then do all testing based on the correct allocation.

Good luck.