Failure of Minimum Coverage Requirements

[luissaha]

I have a multiemloyer plan where the non-bargaining unit group of a participating employer fails both the ratio percentage test and average benefit test. Unfortunately, the falure was not timely discovered and cannot be corrected by an amendment pursuant to Reg. 1.401(a)(4)-11(g)(3)(iv). Does anyone have any ideas how the plan can remedy this problem? I've seen some references that in a situation like this each HCE must include in income an amount equal to the employee's entire vested benefit not previoulsy included in income, but cannot find support for this in any regulations. Also, what about any penalties on the employer and/or the plan for noncompliance?

Any help would be appreciated.

[PensionPro]

You can correct by adding more benefits or increasing existing benefits and submitting under VCP. See Rev Proc 2013-12.

[luissaha]

Thank you. I'll take a look at Rev Proc 2013-12.