DB Plan - Participant paid out based on incorrect salary and got PBGC exemption

Here is a new one for me.

PBGC covered DB plan, owner plus 1 rank&file employee.

Client pushed to have the only non-owner participant to be paid out in 2021 after employee's termination. Client provided the final salary paid for 2021 based on the final payroll (even had them confirm). The final salary for was lower than prior years and did not affect the average compensation

Provided the lump sum and they paid out. So, now the plan was just covering just the owner for the rest of 2021. Went to PBGC and got exemption from further coverage effective 2021 year. All good, well....

Just got the actual 2021 w-2's and the actual salary is much higher that I was provided and affected the 3 year average compensation i.e. the employee was under paid, a lump sum of somewhere between $100 to $200 - did not do the actual math. No 415 issues whatsoever so no MASDs etc.

The question now, what happens with the PBGC exemption? Technically I still do have a rank & file as of 12/31/2021 with a $1.50 accrued benefit and very small lump sum due.

Also, can they pay this participant out based on the prior distribution election form (IRA rollover)?

Anyone had this issue before?

Thanks

Pay him the difference with interest and move on? Not sure if that's the right answer but it seems reasonable given the small size of the data error than is now being corrected.

That is the right answer. People get paid out pensions based on estimated/initially reported compensation (and hours) all the time, only to have actual data subsequently reported that requires a correction and adjusted payment - whether an additional lump sum (which we treat as part of the original lump sum) or a revised annuity payment with a makeup adjustment. 

Thank you both.