Company A and Company B are owned by husband and wife (H&W). H&W are the only employees of Company A. Company B has only NHCE's. H&W establish a 25% MPPP for Company A, but have no separate plan Company B and exclude Company B in the plan for Company A. We've been retained to fix the problem. Is VCR required here, or may contributions for employees of Company B plus earnings be calculated and contributed? What about SVP? Seems like .05 of Appendix A to RevProc 98-22 might apply. Are there other options? Correction by making makeup contributions could be quite expensive.

Look at REv Proc 2000-16, superceded 98-22. I think you arelooking at the expensive fix. Somebody in designing the plan may not have known all the facts about Co B.