Belgarath Posted February 8, 2023 Posted February 8, 2023 Revenue Procedure 2021-30, Appendix B, Section .05(9) provides a special safe harbor correction method for plans that did not necessarily contain a automatic enrollment/increase feature. An "Employee Elective Deferral Failure" is defined for these purposes in Section .05(10), which includes a failure to implement elective deferrals correctly, "...including elective deferrals pursuant to an affirmative election or..." and then goes on to list the Automatic Contribution feature and the improperly excluded employee situation. Section 350 appears to confine this special correction to plans with Automatic Contribution/Escalation provisions, or failure to afford an eligible employee the opportunity to make an election by improperly excluding them from the plan. Try as I might, I can't get to a reading of this that covers this other currently allowable special correction. Section 3 says no QNEC required if the requirements of (2)(B) are satisfied with regard to a reasonable administrative error described in 2(A)(i) or (ii) - and neither (i) nor (ii) appear to cover the special fix for the situation I'm considering. Other thoughts/interpretations? Agree/disagree?
C. B. Zeller Posted February 8, 2023 Posted February 8, 2023 All that sec. 350 did is it made the auto-enrollment safe harbor of .05(8) - which under rev proc 2021-30 was set to expire at the end of 2023 - permanent. The 3-month 0% QNEC and the 3-year 25% QNEC of .05(9) are still in EPCRS and are unaffected. Belgarath 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
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