RT

We have had similar situations, and the correction was to move the deposit to the suspense account and use it to offset future contributions. By leaving it in the participant account, the Plan Sponsor is essentially pre-funding a deferral.

Client accidentally deposited payroll contributions twice for the same effective date. Instead of reversing second transaction, can employer leave the funds deposited alone, and change the effective date of the second deposit to match with the next pay date? The funds would have been deposited before they were withheld from participants' paychecks, but isn't the risk entirely on the employer? There is no harm to participants - in fact, they benefit.