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pam@bbm

Match wasn't capped

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I have a plan with a discretionary match that is calculated and deposited each payroll.     At the beginning of the year the board of directors elected to cap the match at 15% of compensation.      The payroll department didn't apply the 15% cap and 3 participants received excess match - 2 of them $4000 and $6000.         Is the cure for this error to forfeit the excess?    

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Yes if the board resolution amounts to a plan amendment, which it probably does, but opinions may differ and would depend on documentation and surrounding facts and circumstances.

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hello, 

What if the match was not capped over the course of a year.  It was a payroll issue.  The over match is approx 127k

The amounts were removed from the participant account dollar for dollar.  

Once participant is saying the company owes her 1700 because the shares were reduced to make the client whole.

This happened at the time the market dropped.

how would this be corrected at this point.

Approx 50 employees, and mostly HCEs

 

thank you for your insight on this.  I have been looking for a correction for this 

 

Rochelle

 

 

 

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The correction should include it's share of alloccable gains/(losses) from the the time of overage to time of correction. Participant should be put in the same position they would have been had the error not occurred.

 

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It's a discretionary match.  Are the people who were "over matched" HCEs?  If not, you can probably come up with some formula tat can fit the circumstances.  If they are HCEs, then I think forfeiture is a good way to go..

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