late deposit and 415 limits

[K2retire]

Plan sponsor did not submit census data to prepare 2012 testing until 2014. We are the financial advisors. The plan is bundled with Fidelity, who is not responsive to our questions and has not mentioned any of these issues to the client. I think I know the answers to these questions, but I want to double check before we meet next week.

1. Although the document calls for the discretionary match to be calculated on a plan year basis, they deposited it each pay period. As a result several people are due a true-up. Because it is so far after the due date for 2012 contributions, I suspect it will need to be counted in the 2014 415 limit, with all of the attendant issues of those who may have left in the interim. Is that correct?

2. Should the ACP test use the match amounts actually deposited on a timely basis, or the after true-up amounts?

3. The plan fails ADP. So far no one has mentioned anything about needing to do a one-to-one QNEC. Has that requirement changed?

And finally (for my own curiosity, not the client's) is this sort of laissez faire approach typical of how Fidelity operates?

[Kevin C]

1. Sounds like an operational failure to me. I would fix it under EPCRS, which means it would be annual additions for 2012. You should be able to self correct.

2. I'm thinking you would include the true-up, but you should look through Rev. Proc 2013-12 to confirm.

3. At this point I think you would need to correct the ADP failure under EPCRS, which should mean the on-to-one QNEC. I would review the Rev. Proc to confirm.

For your final question, my opinion is yes.