missed match on lost salary deferral opportunity

[cpc0506]

A client missed allowing a few participants to defer and now owe lost salary deferral opportunity. I know that these funds should be classified as a QNEC. But what about the associated match? Are these funds deposited to the match account with vesting attached or are they a QNEC as well?

Thanks for any guidance you can provide.

[BG5150]

No. It's just a matching contribution, subject to vesting, if applicable.

[cpc0506]

I am not sure that I agree with your response. I believe the match is also considered a QNEC if the client currently contributes the match each pay period. If the match is determined at the end of the year and allocated to the participants by the due date of the tax return, then the missed match can be classified as match and subject to vesting.

[BG5150]

From EPCRS:

If the employee was not provided the opportunity to elect and make elective deferrals (other than designated Roth contributions) to a § 401(k) plan that does not satisfy § 401(k)(3) by applying the safe harbor contribution requirements of § 401(k)(12) or 401(k)(13), the employer must make a QNEC to the plan on behalf of the employee that replaces the “missed deferral opportunity.”

If the employee should have been eligible for but did not receive an allocation of employer matching contributions under a non-safe harbor plan because he or she was not given the opportunity to make elective deferrals, the employer must make a corrective employer nonelective contribution on behalf of the affected employee. The corrective employer nonelective contribution is equal to the matching contribution the employee would have received had the employee made a deferral equal to the missed deferral determined under section .05(2)(b).

Notice the piece on deferrals mentions QNEC sepcifically, but the match piece does not.