Participants in a 401(k) plan were set up for an auto increase in their deferrals, but those increases didn't take place because of system problems.

Participants in a 401(k) plan were NOT set up for auto increase in their deferrals, but because of system problems - increases took place. The participants did not authorize these increases.

Obviously, the first step is to get a new system!

But beyond that - what kind of corrections should be made? I think we're dealing with operational failures, correct? Would these be Self Correction Program corrections?

In the first scenario you would make up the missed deferrals and in the second scenario you would return the excess deferrals to the participants?

I would say that your takes on self-correction are appropriate.

What kind of time frame are we talking about here--a pay period or two