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TPA Bob

Ransomware / Missed Deferrals

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We have a client who just started their 401(k) at the beginning of the year.  They have essentially been shut down for days due to ransomware.  They still do not have access to most of their computer functions including payroll.  All election forms are electronic.  And emails are down.

Payroll was manually completed last week (approx 500 employees) and the bare minimum was done to get paychecks out.  FICA, Federal and State withholding.  As their software handled the employees 401(k) in the past they did not have deferrals taken out of the last payroll.  And it appears that they will still be manually required to do payroll for a while (they are not paying the ransom but there are backup issues).  

FYI, safe harbor plan with standard match, determined on a payroll v payroll basis.  No true up.

I have not encountered anything like this in the past.  Generally you can make up missed deferrals if the participant has enough time to make up what was not deferred.  Trying to formulate options.

Any thoughts would be appreciated. 

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