Missed Match more than 12 months after plan year end

If a company misses a few matching contributions for one participant (who is NHCE), back in 2019 and it's now more than 12 months after the end of the plan year, what would be the correction method? The participant was able to contribute deferrals for those periods, but just wasn't matched.

Would you simply fund the matching contribution to the participant? If so, would you adjust for any potential gains during the period?

Thanks,

If you qualify under self correction (SCP) as having procedures in place, its deemed an insignificant failure, and you are still in the 2 year window for corrections you can make the missing matching contribution along with lost earnings. If the failure was for the 2019 year you'd have until the end of the 2021 year to correct I believe.

Where does it say insignificant failures are in the 2-year window.  I see where that is the case for significant failures under SCP, but not insignificant.

My bad. I was mixing up the 2 year period for significant failures. Either way, in this case one employee missing a match and being correcting "relatively soon" would seem to qualify for SCP in this case regardless of whether the error is considered significant or insignificant. Though as always the only 100% sure way would be VCP.

I would feel confident in correcting the match as described in the OP via SCP.

I would add earnings from the time each of the original matches for the other EEs were processed.

How nuts is it to suggest that you'd only have to go back to the date of when the contributions were due to the plan as annual additions?  Like maybe April 14, 30 days after the tax filing deadline, unless the plan specifically allocates the contributions each pay period.

(My probably too-thin argument is that the ability for "early earnings" is a BRF, and perhaps if you've got 9/10 NHCEs getting early earnings, it's not particularly discriminatory for one guy not to get them.)

3 hours ago, Bri said:

How nuts is it to suggest that you'd only have to go back to the date of when the contributions were due to the plan as annual additions?  Like maybe April 14, 30 days after the tax filing deadline, unless the plan specifically allocates the contributions each pay period.

(My probably too-thin argument is that the ability for "early earnings" is a BRF, and perhaps if you've got 9/10 NHCEs getting early earnings, it's not particularly discriminatory for one guy not to get them.)

With interest rates as low as they are today why would you mess around with trying to exclude an earnings calculation which is likely to be pennies?

11 hours ago, Mike Preston said:

With interest rates as low as they are today why would you mess around with trying to exclude an earnings calculation which is likely to be pennies?

Why would interest rates play into anything?  It seems as though the participant has allocations to the match, so it's very simple to determine a close approximation of how much the earnings would have been.

If it's only a few missed matches, once the reports are run, It'll take just a few minutes to put the numbers into the formula in a spreadsheet.

If you say so. That has not been my experience.

15 hours ago, Mike Preston said:

If you say so. That has not been my experience.

What hasn't been your experience, Mike?

Do you just use the VFCP calculator for this stuff?  Even just a few missed matches?

For 2020, VFCP returned 4.06%.  (I used $1,000 from 1/1/2020 to 12/31/2020, amount due $40.61)

If I only have a handful of transactions, I just run reports from the vendor for the dates I need, and calculate estimated earnings from that.  I ahve a spreadsheet, and I just enter open balance, contribs, withdrawals, loan payments and it does the rest.

If it was a big plan, I might be tempted to use VFCP.

That determining actual rate of return is just a simple spreadsheet away.  There always seem to be complications that make that determination time consuming. When that happens, which it seems to more often than not, the course of least resistance is to use the DOL calculator letting the client know that if the government or a participant complains they may owe a little more.