Failing 414(s) Test...how to correct

Plan excludes Holiday bonuses.  Owners (the only HCEs) don't take that bonus.  Plan is failing 414(s).

How do I correct it? 

(It's been a long time since I had a 414(s) test)

Match is SH 100% up to 4%

Retroactively amend to include those bonuses? Don't know what else can be done, unless this means not SH and you run ADP and ACP tests using gross pay rather than plan comp in your denominators.

Wouldn't / shouldn't this have been known ahead of time and been addressed before it became a problem? Was it an amendment, always in the plan, these were never paid before. Obviously the horse is already out of the barn and we have to get him back in - but the barn still needs to get fixed.

29 minutes ago, CuseFan said:

Retroactively amend to include those bonuses?

Agreed.

I have had to have this conversation so many times. 

"But we only give bonuses to the staff, we don't even take one for ourselves, how is this fair???" 

Well...  When you exclude something you only give to rank and file employees, you are taking something away from only rank and file employees.  

Or trying to explain when the HCEs do get bonuses that are otherwise excluded from plan compensation that it's still discriminatory because they're already over the compensation limit. Fun times!

Does anyone have any good resources on how to correct stuff like this?  Changing jobs over the years I've lost what I'm sure was a spot-on webinar on the topic.

You can try and pass the General Test with the compensation excluded (that last part is the part I am least sure about) and if that passes.  I do know you can do the General Test.   

The other thing you can do is find out how aggressive people are willing to be on what de minimis is.  I have seen some attorneys allow as much as a 5% point spread. 

I know not answering your question.  I don't have a good resource. 

General test for the match?