Common use of After-tax Employee Contribution Failures Clause in Contracts

After-tax Employee Contribution Failures. The appropriate corrective contribution for the failure to allow employees to elect and make after-tax employee contributions for a portion of the plan year is equal to the missed after-tax employee contributions opportunity, which is an amount equal to 40% of the employee’s missed after-tax employee contributions. The employee’s missed after-tax employee contributions is determined by multiplying the ACP of the employee's group (either highly or nonhighly compensated), determined prior to correction under this section 2.02(1)(a)(ii)(C), by the employee's plan compensation for the portion of the year during which the employee was improperly excluded. If the ACP consists of both matching and after-tax employee contributions, then for purposes of the preceding sentence, in lieu of basing the missed after-tax employee contributions on the ACP for the employee's group (either highly compensated or nonhighly compensated), the employer is permitted to determine separately the portions of the ACP that are attributable to matching contributions and after-tax employee contributions and base the missed after-tax employee contributions on the portion of the ACP that is attributable to after-tax employee contributions. The missed after-tax employee contribution is reduced to the extent that (1) the sum of that contribution and the actual total after-tax employee contributions made by the employee for the plan year would exceed (2) the sum of the maximum after-tax employee contributions permitted under the plan for the employee for the plan year. The corrective contribution is adjusted for earnings.

After-tax Employee Contribution Failures. (1) The appropriate corrective contribution for the failure to allow employees to elect and make after-tax employee contributions for a portion of the plan year is equal to the missed after-tax employee contributions opportunity, which is an amount equal to 40% of the employee’s missed after-tax employee contributions. The employee’s missed after-tax employee contributions is determined by multiplying the ACP of the employee's group (either highly or nonhighly compensated), determined prior to correction under this section 2.02(1)(a)(ii)(C), by the employee's plan compensation for the portion of the year during which the employee was improperly excluded. If the ACP consists of both matching and after-tax employee contributions, then for purposes of the preceding sentence, in lieu of basing the missed after-tax employee contributions on the ACP for the employee's group (either highly compensated or nonhighly compensated), the employer Employer is permitted to determine separately the portions of the ACP that are attributable to matching contributions and after-tax employee contributions and base the missed after-tax employee contributions on the portion of the ACP that is attributable to after-tax employee contributions. The missed after-tax employee contribution is reduced to the extent that (1i) the sum of that contribution and the actual total after-tax employee contributions made by the employee for the plan year would exceed (2ii) the sum of the maximum after-tax employee contributions permitted under the plan for the employee for the plan year. The corrective contribution is adjusted for earnings. The requirements relating to the passage of the ACP test before this correction method can be used, as described in Appendix A section .05(2)(g) still apply.