Determining Missed Deferral Under EPCRS

[Lauren0507]

EPCRS provides the missed deferral opportunity (MDO) is equal to 50% of the employee's missed deferral.  The missed deferral is determined by multiplying the ADP of the employee's group (HCE/NHCE) by the employee's compensation.  We have a situation in which 2 HCEs participated in the plan 2014-2018 and during each of those years a NHCE was not given the opportunity to defer.  Since there is no NHCE group in the Plan, how is the missed deferral determined?

[C. B. Zeller]

I do not know if there is a prescribed method, but I would think it should not be less than the amount that would be required for the plan to have passed the ADP test each year.

Were you planning on self-correcting? Given that the failure spanned multiple years and involved 100% of the eligible NHCE population being excluded from the plan, I think this points to a significant failure which would have to be corrected under VCP.

[Mr Bagwell]

I was curious if the plan would require top heavy contributions?

[Lauren0507]

Thank you, C.B.  That makes perfect sense.  

Good point, Mr. Bagwell.