Failed 414s test in safe harbor plan

[30Rock]

Safe harbor plan fails compensation ratio test for the match since bonuses are excluded. The plan document does not provide any type of correction method such as use total compensation. Does an 11(g) amendment correct this situation where compensation would be added back? I remember hearing in the past that if a safe harbor plan fails compensation tests it blows the safe harbor, unless the base document has a correction like the AQSC document does. This plan uses a pre-approved document but no correction language has been located. How do we proceed? Thanks!

[Bri]

Can you allocate additional benefits anyway so that if you at least test on 415 pay everyone could come out equivalent?

[30Rock]

I think something like that would be needed. I recently found this prior discussion on this board.

[Kevin C]

If the document doesn't have a correction method, an -11(g) amendment will be needed. The plan document says the plan is safe harbor and the compensation definition used for safe harbor contributions is required to satisfy Section 414(s).  See 1.401(k)-3(b)(2) that uses the compensation definition in 1.401(k)-6.  The -11(g) amendment can add back a the % of NHCE bonuses that will let 414(s) testing pass.  

1.401(k)-6

Compensation. Compensation means compensation as defined in section 414(s) and § 1.414(s)-1. The period used to determine an employee's compensation for a plan year must be either the plan year or the calendar year ending within the plan year. Whichever period is selected must be applied uniformly to determine the compensation of every eligible employee under the plan for that plan year. A plan may, however, limit the period taken into account under either method to that portion of the plan year or calendar year in which the employee was an eligible employee, provided that this limit is applied uniformly to all eligible employees under the plan for the plan year. In the case of an HCE whose ADR is determined under § 1.401(k)-2(a)(3)(ii), period of participation includes periods under another plan for which elective contributions are aggregated under § 1.401(k)-2(a)(3)(ii). See also section 401(a)(17) and § 1.401(a)(17)-1(c)(1).