My wife has participated in an employer sponsored SIMPLE IRA from June 2011 to Dec 2016. During this period, her employer failed to follow IRS guidelines for the plan. I'll list the violations I was able to spot:
1) Voluntary payroll deductions were not deposited in a timely manner. In some years, all payrolls deductions were held by her employer and deposited as a lump sum at the end of the year. Other years, no deposits were made until the following year.
2) Her employer gives no notice of an enrollment period. She's had no notice of plan changes or any details about the plan since she joined in June 2011.
3) Her employer has not specified whether they follow a 3% match or 2% non-elective compensation.
4) Regardless of item 3, her employer only deposits 1% of her annual salary to the fund. I'm not completely certain this is how they're calculating the employer match because the employer deposits are sporadic and even absent some years.
My wife's employment ended Dec 31, 2016, but I noticed these errors while my wife was still employed. I encouraged her to contact EBSA to file a complaint regarding the missing and late deposits, but she was afraid of being fired. So, she approached her employer and asked for the deposits to be made in a timely manner. They weren't very receptive, but they did begin to deposit her voluntary contributions monthly. They did miss some months here and there and as of now the most recent deposit was made on 10/03/2016.
She left the company after being denied a cost of living increase and I'm reasonably certain her former employer will not be making any more deposits into her account, despite their legal obligation to do so. I think I've finally talked her into pursuing this with the EBSA, but I'd appreciate some advice on what to expect.
First, will the source of the complaint remain anonymous to her employer? She is now self employed in the same field that her former employer operates in and she is fearful that they will defame her character in retaliation if they find her to be the source of the complaint. I'm almost certain she is not the only employee whose IRA has been mismanaged, for what it's worth.
Second, after some reading it appears the SIMPLE IRA may be invalidated for a year in which the employer made certain violations, like not depositing matches. Is this a possibility her? What should she expect if this happens? Will there be tax liability on our end?
Third, will her employer be responsible for compensating lost earnings due to late deposits? Her investment fund wasn't the greatest, but she did miss out on some earnings.
Any and all advice you can offer is much appreciated.
Edit: I've uploaded a screen shot of the plan transactions so you can see how sporadic and untimely they were. My wife was being paid biweekly and had $50 voluntarily deducted from each paycheck.
