Calendar Year Plan. 2007 ADP test failed and correction method chosen was refunds. Testing was done disaggregated between Stat EEs and OEEs. All refunds were initiated and all were processed in 5/2008 except for one participant who had a self directed brokerage account. His refund was never processed. In 8/2009, the oversight was discovered. What is the correction? It would appear to be a self correction under EPCRS, but it is not specifically addressed. Here are the options that I have come up with. I think #3 would be my chosen conservative correction, but I would consider #2. I think #1 is a bit aggressive and #4 a bit conservative.
1) Refund the calculated amount with gap earnings and stop there.
2) Refund the calculated amount with gap earnings and process a 1-to-1 qnec based on the calculated refund amount.
3) Recalculate the refund amount for the one participant under an aggregated test run, include gap earnings, and process a 1-to-1 qnec based on the revised calculated refund amount.
4) Recalculate the refund amount for all of the participants under an aggregated test run, include gap earnings, and process a 1-to-1 qnec based on the revised calculated refund amount less any amounts previously refunded. (Refund the ommitted participant as in #3.)
Please provide opinion or please feel free to suggest another option. If possible, please provide any back-up to justify the response.
Thank you in advance.