KEC79

EPCRS Safe Harbors -- Catch-ups?

4 posts in this topic

Appendix A, Sections .05(9)(a) and .05(10) of Rev. Proc. 2016-51 describe a safe harbor correction method for certain "Employee Elective Deferral Failures" -- which is defined as a failure to implement elective deferrals correctly.  The safe harbor correction method provides that if an error lasted less than 3 months and proper/timely notification is given to the employee, the employer doesn't need to correct the missed elective deferrals.  I'm comfortable that this would extend to a failure to implement a pre-tax or Roth contribution election, but I'm wondering if this treatment extends to catch-up contributions, too.  

Share this post


Link to post
Share on other sites

Could you provide an example?  Are you saying that a person wishes to defer in excess of $18,000 during the year, but have their deferral curtailed at $18,000 in the month of December?

I don't necessarily see that as a 'failure to implement' but a 'failure to follow'. Better yet, a 'failure to continue to follow' :-)  

I would imagine it would depend on how neatly your fact pattern fits into the (and it hate to use the word)  tone that is laid out for describing the corrections.

Good Luck!

Share this post


Link to post
Share on other sites

I've run into several payroll companies whose bundled plans require a separate election for catch up contributions. Is that the case in your situation KEC?

Share this post


Link to post
Share on other sites

I don't see why it wouldn't.  If the employee could have modified their deferral election for the year to hit the $24,000 combined 402(g) and catch-up limit, it seems that the same rules apply. 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now