"EPCRS requires ADP/ACP test failures corrections beyond the 12-month period to include not just a refund, but also to make an additional one-to-one QNEC in the same amount of the refunds.... To correct an ADP failure, the plan sponsor can elect to use the 'bottom-up leveling method.' Because the ADP test gives an equal weight to each person included in the test, a small QNEC contribution to a person who earned minimal wages due to short-term employment or termination early in the year has a much greater impact on the test results than the same contribution to a full year employee.... QNECs can become very expensive, and plans that continue to fail discrimination tests may need to look for an alternative plan design."  MORE >>