I'm not sure how to proceed and appreciate the assistance. My previous employer's 401(k) plan allows participation after 1 month of service and employer safe harbor matches (100% up to 4% of comp) after 1-year of service.
I joined the company in July 2014 and in 2015, I maximized my deferrals early in the year and had contributed the full $18k by April. Starting July 2015, I began receiving safe harbor contributions in each payroll cycle which equaled $6k by year-end. I recently received a letter stating the administrator had removed $6k to correct the ineligible safe harbor contributions. The company said I was only eligible to receive a match for deferral contributions that were made following my 1-year anniversary (July) and since I had already maxed my contributions by April and had no further contributions, I wasn't due any match.
The plan states that "For purposes of calculating the safe harbor matching contribution, your compensation and deferrals will be determined on an annual basis", wouldn't deferrals made at any time in 2015 be eligible for a match, based on compensation earned after my 1-year anniversary?
If, on the other hand, this was an error and I received a match I wasn't entitled to, is the only remedy to remove the $6k from my account or could/should the plan implement the early inclusion amendment as per the Early Inclusion of Otherwise Eligible Employee Failure correction protocol? The majority of fund shares purchased with company safe harbor contributions had negative returns from the date of purchase until they were sold to raise the $6k. Couldn't the company sell the number of fund shares purchased with safe harbor matching funds rather than taking the full $6k? It doesn't seem fair that I should be worse off because of the company's error.
