There appears to be a difference between correcting for a missed match when it is due to 1. excluding an employee whereby there is then a missed opportunity to defer and receive the match versus 2. a payroll glitch where suddenly matching contributions are not submitted on behalf of an employee who is deferring at a known rate, such that match is missed for say 6 months. It appears that the way to correct for situation 1 above is covered in EPCRS Rev Proc 2008-50, however a missed match when there has been opportunity to defer is not really discussed in EPCRS. If I am reading the Rev Proc correctly, Appendix B states a method for correcting matching contribution failures when the employee is precluded from deferring. In this correction, it appears you base the corrective contribution on the ADP % for the employee's group and then calculate the match based on the formula in the plan by using the ADP %. However, you would only correct after the ADP and ACP tests had been performed and passed, and the amount of match for an HCE could only be up to the ACP cap for that group. This way you do not have to re-run the ACP test. Is this correct?
On the other hand for a missed match under situation 2 above, when it comes time to submit the missed match, you know what is due the participant, and once submitted I assume you would re-run the ACP test, because you are submitting a missed match late and want to make put all the participants in the same position they would have been in had the match been made timely and included in the original ACP test. So it seems that situation 1 is easier to correct because you do not have to re-run the ACP test, could you apply this same correction for a missed match under situation 2?

Your situation 2 appears to be saying that the match was not deposited according to the formula in effect for a particular participant. Wouldn't the correction be to deposit it now, possibly adjusted for lost earnings?

Yes we are wanting to contribute the missed match now plus lost earnings. However it is beyond 12 months following the end of the plan year, so when the ACP test is re-run and if it fails, I assume it is too late for refunds and so the one to one correction method or QNEC's will be needed. My confusion is that with situation 1 where an employee is missed entirely, it appears that the ACP test does not need to be re-run, so it is much easier to fix it.

for purposes of the ACP test

1.401(m)-2(a)(4)(iii)(C) says matching contribution is actually paid to the trust no later than the end of the 12 month period immediately followining the year that contains that date.

it doesn't sound like the make up match was actually deposited within 12 months, so I think that says you don't include them in the ACP test.

Then do they become nonelective contributions subject to 401(a) (4) testing - we do not want this, as the employee in question is an HCE and the plan does not have nonelective contributions, so 401(a)(4) testing will fail!!! I think the only sensible correction is to treat them as missed match, but per TAG data to do so means you must run the ACP test. I am referring to situation 2, where the employer failed to remit the contributions timely. Thanks.

I don't know.
I guess the question would be one of "Why is this 12 month rules in the regs? "- in other words, under what conditions would a match ever be deposited after 12 months that wouldn't be a make-up match? I've never heard of a situation in which an employer in the year 2010 would decide to make a match for the 2008 plan year. And remember the same rule applies to a deferral- if it wasn't deposited until 12 months after the fact - and I think you would have to agree a deferral deposited that late would certainly be a make up deferral, so why would the logic be different for matches?
but if treated as a non-elective contribution, then as you indicated, if it only applies to HCE you might fail the a(4) test. But since you would be after the 9 1/2 month deadline for correcting the problem, then you would have to fix using VCP, which I wouldn't think is the intent of the regulation.
well, I'm sure someone wiser than me knows the answer.

There are a couple of things in Rev. Proc 2008-50 that might help.





Looking first at the ADP test, I think this says that if the deferral correction causes an ADP test failure after you include the missed deferral in the ADP test, then you have to do a correction for the failed ADP test. I think a reasonable interpretation is that the same would apply to the ACP test if you are correcting matching contributions.