Victor

Thank you for the great comments, this is much better than searching through old posts! I think we better consult with a ERISA attorney to further proceed with this. This seems much bigger than I thought. I don't see it going in any other way neither. After all, IRS would definitely want to favor employees regardless how policy is set without anything written in a piece of paper.

Hi Everyone, I know this question has been asked a million times already, but I owe my due diligence to my employer to ask this question again in order to make sure that there's no way around this. Please bear with me. I am an administrator for our 401k plan which existed since 1999, and this entire time, our plan doc has allow all W-2 compensations which included bonus; however, our general unwritten policy has always been to exclude bonus from deferral. All 18 years, we have never deferred any compensation related to bonus and now our auditor has recommended a SCP to correct this. I've looked through the adoption agreement, asked our 401k vendor and confirmed that our plan indeed never excluded bonus. This is a new auditor and it's hard to believe that the previous auditors have missed this the entire time. The recommendation is to do recalculate the missed deferrals for at least the last 3 years. Is there a way to correct this without doing a SCP which includes QNEC from the employer of over 40-50k? I am not sure it's helpful to know but we've always executed bonus payment in a separate payroll from our regular payroll schedule. Thank you,