Missed Deferral Opportunity/Match - QNEC deposit

[TPApril]

I understand the missed deferral is treated as a QNEC.  I'm unclear if that is just from the ER's perspective and it needs to be deposited into a source named QNEC, or can be put into the 401k source, since it will be 100% vested there etc.

Also, the missed match, I think it can just be deposited into the match account, not a QNEC account.

(Lost earnings included in above).

[401kAllTheWay]

Not sure if it is dependent upon the record keeper but it was always a different source for the QNECs I have seen in our plan. The missed deferral was calculated first then the earnings.

I am not 100% certain on the match so don’t want to provide incorrect guidances 

[Towanda]

Because a QNEC is typically a contribution made in response to a plan correction of one kind or another, do not park QNEC money in any source other than QNEC.  Vesting is not the issue.

• You must have an audit trail.  
• A QNEC is not a Salary Deferral.
• A Salary Deferral is not a QNEC.

Regarding the missed Match, that is deposited into the Match source because it is treated as a Match and is subject to the Match vesting schedule.  

[BG5150]

Plus there may be different distribution restrictions between QNEC and deferrals, so another reason not to mix the two.  Also, if the participant only has Roth deferrals, the QNEC funds should not get Roth treatment.

[austin3515]

Call me mr. practical but I'm not adding a new QNEc source to fund $50 of corrective contributions for one person.  I'm just depositin to 401k.  If there was some massive correction ok fine.  If we were doing QNEC's to pass an ADP test, sure I would do a QNEC source,. 

I've always said this, whic is 100% true:  IT's still  a QNEC it's just deposited to the 401k source.  Oh and by the way QNEC and 401k are both treated teh same for vesting, etc.  I know, I know, maybe the hardship trearment is not the same.  So maybe one guy might get $50 more of a hardship than he is entitled to.  Is it worth all the rigamarole with forms, signatures, RK updates to the platform for $50 of QNEc to one person?  Even two or 3?  MAn I'll tell ya I think the answer is no.