Sec. 415. Safe harbor for corrections of employee elective deferral failures
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Section 414 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: Any plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error. For purposes of this subsection, the term corrected error means a reasonable administrative error in implementing an automatic enrollment or automatic escalation feature in accordance with the terms of an eligible automatic contribution arrangement (as defined under subsection (w)(3)), provided that such implementation error— is corrected by the date that is 9½ months after the end of the plan year during which the error occurred, is corrected in a manner that is favorable to the participant, and is of a type which is so corrected for all similarly situated participants in a nondiscriminatory manner.
Such correction may occur before or after the participant has terminated employment and may occur without regard to whether the error is identified by the Secretary. The Secretary shall, by regulations or other guidance of general applicability, specify the correction methods that are in a manner favorable to the participant for purposes of paragraph (2)(B). . The amendment made by this section shall apply with respect to any errors with respect to which the date referred to in section 414(aa) (as added by this section) is after the date of enactment of this Act.