Enmgy Q-00002-14-s Series1 Admin-1 Cpe Hour For A Score Of At Least 70%

When a plan sponsor does not make timely ADP test corrections by refunding excess contributions to HCEs, late correction can be done using the one-to-one correction method or pro-rata QNECs.

When a plan sponsor still needs to correct a failed ADP test from a 2012 calendar plan year, SCP self-correction is still an option since the 2-year self-correction window runs from January 1, 2014 to December 31, 2015.

When a late ADP test correction is being done after the normal 12-month correction period, the otherwise excludable option or disaggregation rules cannot be utilized when determining the extent of corrective actions that will be necessary.  

When a late ADP test correction is being made using QNECs during the self-correction period, Rev. Proc. 2013-12 indicates that QNECs may be allocated using a Targeted QNEC allocation method.

The VCP formal correction process should always be used as the approach for correcting non-amender defects

The VCP formal correction process should be used for the correction of operational defects when the timing of the operational defects falls outside of the 2-year window period permitted for self-correction.  

When making a formal VCP submission to the IRS, if advanced corrective actions were taken before the IRS issues a Compliance Statement, those actions may have to be undone if the IRS does not approve the proposed corrective actions.

The VCP formal submission should include a ‘proposed correction method’ and the plan sponsor should understand that this ‘proposed correction method’ is only viable if the IRS agrees to it  

The ‘missed deferral’ for an eligible HCE in a plan year when the NHCE ADP was 6.5% and the HCE ADP was 8.5% is equal to 8.5% times the participant's Compensation and the 'missed deferral opportunity' is equal to 50% of the 'missed deferral' amount.

When a plan sponsor has improperly excluded employees from receiving the right to make salary deferrals under a Safe Harbor 3% nonelective 401(k) Plan, the formula to determine the 'missed deferral opportunity' is equal to 3% times 50%, or 1.5% times the Compensation for the Plan Year.