Have a 3% Safe Harbor with integrated profit sharing plan.

5/6 NHC participants terminated with greater than 500 hours - profit sharing formula has 1000 hours and last day provision.

Plan fails 401(a)4 in miserable fashion for ps allocation.

When doing a corrective amendment, do all 5 participants have to be brought into the ps allocation or can you select the minimum number of terminated participants to get it to pass (a)4? What is the rationale for selecting participants to bring into the allocation?

check your doc--might say bring in latest term dates first until you pass coverage
or--does doc allow to use ave ben test to pass(if you could pass) --the plan doesn't suspend alloc req's

That language is only for failing 410(b). It doesn't have any language for a 401(a) failure.

wouldn't it be similar to the situation if they were only rec'ing th min? you couldn't pass coverage if the nhces were a NO --only rec'ing th min and not full p/s alloc. (i know we are talking about 3%sh)

The answer is that you could correct only the number of people necessary. I would advise some method to your madness however, based upon highest hours for example. You can even state the formula without stating the precise number of corrections if you wish, i.e. "the minimum number of people necessary, ranked by hours, to enable each rate group .....". The formula and mechanism should be unambiguous but need not name names or numbers.