ECPCRS - Missed Deferral Oppotunity Corrections for 401k

Where in EPCRS does it indicate that contributions made just for HCE's due failures applicable to HCEs are not going to cause nondiscrimination problems.

So HCE's deferral election was not implemented.  QNEC / Match make up not required.  There must be something in EPCRS that says if I correct for an HCE the correction does not create a nondiscrimination issue.  Where is that?

1 hour ago, austin3515 said:

There must be something in EPCRS that says if I correct for an HCE the correction does not create a nondiscrimination issue.  Where is that?

"Must" you say? Strong assertion there. Unfortunately EPCRS is silent on the matter.

If you have access to ERISApedia, chapter 9.8.5 of the Plan Corrections eSource addresses this question.

I didn;t pay for any of those, I just use it for the regs really, and all the IRS notices and Q&A'. the official stuff.  Can't justify the EOB plus that as well.  But it is tempting..  I also use their Q&A service which is super awesome.

As far as I am concerned the fact that they don;t mention it to me is confirmation that its not an issue.  They did not say "thou shalt not correct missed deferrals for HCE's because then only HCE's are getting Nonelective Contributions" and therefore it's not an issue.

Can I venture a guess that's along the lines of what eSource said?

Do employers get a deduction for the corrective contributions?

I was under the impression that the contributions are deductible (and part of the typical 25% limitation) but the earnings amounts are not.

1 hour ago, austin3515 said:

I didn;t pay for any of those, I just use it for the regs really, and all the IRS notices and Q&A'. the official stuff.  Can't justify the EOB plus that as well.  But it is tempting..  I also use their Q&A service which is super awesome.

As far as I am concerned the fact that they don;t mention it to me is confirmation that its not an issue.  They did not say "thou shalt not correct missed deferrals for HCE's because then only HCE's are getting Nonelective Contributions" and therefore it's not an issue.

Can I venture a guess that's along the lines of what eSource said?

I really like the Corrections eSource; it is like a searchable, indexed, and hyperlinked version of EPCRS with examples. I almost always find it much faster to find what I'm looking for in the Corrections eSource, then follow the reference from there into RP 2021-30.

Basically, they said that it's their opinion that the corrective contribution takes the place of the missed contribution and wouldn't be counted in 401(a)(4) testing.

3 hours ago, C. B. Zeller said:

Basically, they said that it's their opinion that the corrective contribution takes the place of the missed contribution and wouldn't be counted in 401(a)(4) testing.

For a non-hce, absolutely.  The requirement is that 401(a)(4) passes with and without considering any QNEC (11g exclusive) because a bottom-up QNEC will undoubtedly skew the results towards passing while not necessarily benefitting other non-hce's in the anticipated fashion.  And a corrective contribution is likely going to a similarly profiled participant.  But in the case of a HCE corrective, you have the opposite issue, and would need to consider it in the test.