t.haley Posted April 13, 2021 Posted April 13, 2021 Originally posted this question in the correction of plan defects forum but got no responses. Thought I would post here to see if anyone has any ideas: Employee made deferral election upon beginning employment in September 2020. Recently discovered that no deferrals were made from September through December, 2020. When new plan year began and employee completed annual enrollment forms, proper deferrals began January 2021. Since we just discovered the missed deferrals, we cannot meet the 45-day notice requirement under the safe harbor correction method. Should we go ahead and make the 25% QNEC plus earnings and give the employee notice and move on or must we correct under the regular method for missed deferrals? Thoughts?
EBP Posted April 14, 2021 Posted April 14, 2021 EPCRS App. A .05(5)(a) applies. You are not eligible for the safe harbor correction method contained in App. A .05(9)(b), which says that "in order to use this safe harbor correction method, the Plan Sponsor must satisfy the following conditions:....(ii) Notice of the failure...is given to an affected participant not later than 45 days after the date on which correct deferrals begin..." So calculate the 50% QNEC plus earnings, make the QNEC for the participant, and move on. It shouldn't be a lot. ugueth 1
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