failure to make safe harbor 401k contribution

[goldtpa]

plan has a safe harbor 401k using 3% NEC. ER fails to make a contribution for one of the HCEs in 2012 and 2011. I assume the plan has failed to make SH contributions for this HCE since the beginning of the plan.

I assume the fix would be to make the missing contributions plus interest. Thanks.

[Tom Poje]

well, under EPCRS Appendix A .05 (2)(d)(iii) that is what it says to do.

(iii) In the case of a failure to make the required nonelective contribution for a plan year under a safe harbor § 401(k) plan that uses the nonelective contribution under § 401(k)(12)© to satisfy the safe harbor requirements of § 401(k)(12) or that uses the nonelective contribution under § 401(k)(13)(D)(i)(I) to satisfy the safe harbor requirements of § 401(k)(13), the nonelective contribution (which must be a QNEC in the case of a plan that uses § 401(k)(12) to satisfy ADP) required to be made on behalf of the employee is equal to 3% of the employee’s compensation during the period of the failure. For this purpose, the period of the failure for any plan year ends at the end of the plan year or, if earlier, the later of June 18, 2009 or the date 30 days after notice was provided to employees as required under applicable Treasury Regulations (see § 1.401(k)-3(g)(ii) of the proposed regulations, at 74 FR 23134).

the 2011 contribution was due by 12/31/2012 so gains must be made included.

[goldtpa]

Thanks. I was just making sure.