Can you correct Incorrect QNEC???

[kmhaab]

1.  If a plan sponsor makes a QNEC to make up for missed deferrals that is equal to 100% of missed deferral opportunity instead of 50%, is that ok?

2.  If a plan sponsor makes QNECs of 50% missed deferrals to correct one type of error (incorrect definition of compensation) and QNECs of 100% missed deferrals to correct a different error (failure to correctly implement election due to incorrect application of deferral limits), is that ok?

Plan sponsor made corrections to 401k plan in Dec 2016 to correct for incorrect definition of compensation. Some employees received 50% QNECs to make up for missed deferrals, others received distributions of excess amounts.

In March 2017 sponsor realized the Dec distributions resulted in several highly paid participants deferring an amount less than the statutory limit when they would have deferred the statutory limit if the errors had not ocurred. i.e. Person A elected to contribute 10% of pay. His contributions were stopped in July when he hit $18,000. In Dec, correction was made for inclusion of ineligible comp in those deferrals and he received a distribution of $1,500. No adjustment was made for his contributions being "turned off" in July due to limit, thus his total contributions for 2016 were $16,500.  However, if his election had been implemented correctly he would have continued deferring until he hit $18,000. Sponsor made a QNEC of $1,500 in March 2017 to correct.

The question is whether there is a issue with the 100% QNEC made in March (small number of more highly paid) being inconsistent with the 50% QNECs for most participants, and if so, what should be done?