de minimis distribution exception EPCRS

[JJRetirement]

I have a question about the application of the  exception to full correction in EPCRS allowing a sponsor to not make a corrective distribution of $75 or less "if the reasonable costs of processing and delivering the distribution to the participant or beneficiary would exceed the amount of the distribution." (section 6.02(5)(b) of Rev. Proc 2016-51. 

The provider's fee is $100 for each distribution and it is charged to the participant (rather than paid by the sponsor).  Is the $75 threshold applied to the full amount of the distribution before fees are taken out or to the amount of the distribution that the participant would be entitled to after fees are deducted? 

As an example, say a participant terminated some time back and no longer has an account balance - they have been paid out their balance in a prior plan year.  They are due a now correction of $90 for lost interest.  Given the $100 fee, for purposes of the de minimis exception, are they due $90 or $0 (net the fee).  

Similarly, if a participant has no balance and is due $110 (gross), that would be $10, net of the fee.  Presumably, the $100 fee would cover the reasonable costs of distributing the amount, so the vendor would need to send a check to the participant for $10.

The amounts of any distributions not made due to application of this de minimis exception would be allocated to other participants in the plan.  

Not that it matters for purposes of this question, but this error was the subject of a DOL investigation, and the DOL has already issued a closing letter.  They have requested that the client confirm deposit of the interest amounts and allocation to affected participants.  That will take care of the fiduciary issue.  I am comfortable proposing to DOL that amounts under $100 be reallocated to other participants, and expect that this will be acceptable to them.  However, I realize the qualification defect will also need to be corrected, so I don't want to think this is all wrapped up and then have the IRS tell us we need to do something else with those account balances between $75 and $100, likely several months after all of the other distributions have been made.