Missed deferral opportunity

I know the missed deferral opportunity amount is a % of the ADP of the group to which the participant belongs.

But what if it crosses plan years?

I have someone who was missed on 7/1/21 and we just found out about it this month.  The ADP of his group was 3.25% for 2021.  But do I have to calculate the 2022 ADP (next year!), or do I just use 3.25% for the entire period?

BG5150, Rev. Proc. 2021-30 refers to the percentage "for the year of exclusion," so I think they would want you to calculate the percentage separately for each year.

Would it be appropriate - if possible - to get the YTD payroll data from the sponsor and calculate a sort of year-to-date 2022 ADP?   Since this is self-correction, would an IRS examination agent balk at such methodology?

Obviously easier with a smallish plan than with one where the eligibility for 1,000 people needs to be scrutinized.

9 hours ago, Bri said:

Would it be appropriate - if possible - to get the YTD payroll data from the sponsor and calculate a sort of year-to-date 2022 ADP? 

Would seem to be a creative and reasonable approach.

9 hours ago, Bri said:

would an IRS examination agent balk at such methodology?

Not completely predictable of course because your dealing with discretion and personalities. If there was nothing unusual in the plan's facts that pushed the ADP to the low side for the first months of the year, you'd think it should be OK.