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Vcp For 403(B)

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a small 403(b) (less than 12 participants) was established in 2005. Plan allows for deferrals and a 6% employer base contribution only. Document states no age/service requirements and only excludes the basic leased, no resident, etc.


The plan has uniformly and non-discriminatory been operating under the eligibility requirements of 1 year of service and age 21. I understand that the Universal Availability requirement applies and that all non-excluded employees should be allowed to defer upon entry date (first day of the month following date of hire).

My questions are:


1) Would the sponsor be required to allow the participants to go back and make up deferrals for the year they were not in the plan? Would the plan sponsor have to make up any deferrals?


2) If the plan was operating not in accordance with its provisions, but was in fact operating uniformly and non discrim, could they amend the plan retroactively to state that the eligibility is in fact 1 YOS/age 21 for the 6% employer base? This would allow the sponsor to not have to go back and make up the 6% for each participant.


3) If the plan could not retroactively amend through VCP, then the solution would be for the plan to fund the 6% and it would have to calculate the gain/loss on those amounts to make the accounts whole, correct?


Thanks in advance for comments.

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