New Plan,ees missed

[doombuggy]

Plan was set up in 2014 with an age 21 and 6 mo of service entry requirement, monthly entry dates.

I found out this week that the census I was provided was not all employees, just those who participate, even though our form requests all info.

1 part timer apparently went full time this month and the client asked me if she has to wait 6 months to get in since she was hired in January 2014. This is how I discovered this problem. The annual val and 5500 is complete and filed.

We are waiting for a corrected census from the client. Isn't the correction for the ER to fund a 3% deferral for those ees that were not offered the plan timely? This is a deferral only plan.

[Bill Presson]

There was an update to the EPCRS this year that covered this. I think it's Rev Proc 2015-27.

[justanotheradmin]

See Appendix A in Rev Proc 2013-12.

If using EPCRS - SCP Missed Opportunity to Defer is usually deemed to be the NHCE ADP.

Since the missed time period appears to be greater than 3 months, but less than the SCP correction time period (usually two year) then the corrective QNEC is 25% of the MOD plus earnings. See Rev Proc 2015-28.

Assuming calendar year: Keep in mind the ADP test does not include the QNEC or the employee for 2014. Per Appendix A of 2013-12 "the plan may rely on a test performed with respect to those eligible employees who were provided with the opportunity to make elective deferrals or after-tax employee contributions an receive an allocation of employer matching contributions, in accordance with the terms of the plan, and may disregard the employees who were improperly excluded."