Search the Community

Who is responsible for the following and what - if any - correction(s) is(are) necessary: Participant completes 401k Election Form, electing 8% pre-tax withholding. On the bottom of the participant's 401k Election Form just prior to the participant's signature and date, the form states: "Duty to Review Pay Records. I understand I have a duty to review my pay records (pay stub, direct deposit receipt, etc.) to confirm the Employer has properly implemented my salary deferral election. Furthermore, I have a duty to inform the Plan Administrator if I discover any discrepancy between my pay records and this Salary Deferral Agreement. I understand the Plan Administrator will treat my failure to report any withholding errors for any payroll to which my Salary Deferral Agreement applies, by the cut off date for the next following payroll, as my affirmative election to defer the amount actually withheld (including zero). However, I thereafter may modify my deferral election prospectively, consistent with the Plan terms." The participant has not come forward indicating there has been an error in his 401(k) amount being withheld from payroll. There have been 2 payrolls since the election was made/signed/turned in to the Plan. Does the Plan have to alert the Participant that is has recently discovered the Payroll Company reports reflect $8 per pay (not 8%) being withheld? If the Plan must alert the Participant, does the employer have to correct the matter: (a) going forward (b) going forward only if the Participant confirms he wants his 8% Election put into place © going forward only if the Participant confirms he wants his 8% Election put into place, with the correction effective with the next plan permitted "election change" date, or, (d) by (the employer) contributing 50% of the difference between the amounts withheld v. the amount based on election, plus interest?