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Showing results for tags 'missed deferrals'.
Found 5 results
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Client forgot to enroll an eligible employee and has missed deferrals in a tax exempt 457(b) plan that the employer participates in. My understanding is that, since there is limited opportunity to submit corrections to the IRS under Section 4.09 of EPCRS, that practitioners interpret that to mean that corrections for 457(b) plans can generally follow those prescribed under EPCRS for qualified plans. So in this case we would corrective contributions for the participant's missed opportunity to make a contribution/invest (e.g., 50% of missed deferral) as under EPCRS.
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Facts: Bonuses being paid today. Employer failed to withhold pretax deferrals from some (not all) participants' bonus paychecks being distributed today. The Plan affords participants to make a special election wrt bonus pay. If no election is made, zero is withheld. Upon reviewing the "bonus payroll" process, the employer realized the error but the funds were already "in process" to the participant's banks and could not be reversed/corrected in time. Questions: Since the error was caught the same day, is the correction to issue a Notice to those affected along with a deferral election form, giving them the opportunity to withhold what would have been withheld from their respective bonus (or some other amount at their discretion) via the up-coming final regular paycheck of the year? I believe all will receive sufficient final paychecks to adequately cover this missed deferral. If not, does this change the correction? Thank you
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We have a client who just started their 401(k) at the beginning of the year. They have essentially been shut down for days due to ransomware. They still do not have access to most of their computer functions including payroll. All election forms are electronic. And emails are down. Payroll was manually completed last week (approx 500 employees) and the bare minimum was done to get paychecks out. FICA, Federal and State withholding. As their software handled the employees 401(k) in the past they did not have deferrals taken out of the last payroll. And it appears that they will still be manually required to do payroll for a while (they are not paying the ransom but there are backup issues). FYI, safe harbor plan with standard match, determined on a payroll v payroll basis. No true up. I have not encountered anything like this in the past. Generally you can make up missed deferrals if the participant has enough time to make up what was not deferred. Trying to formulate options. Any thoughts would be appreciated.
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Employer was not updating participants deferral changes they made on the Recordkeeper website. The plan is 3% Safe harbor, so no matching to worry about. So if a plan missed updating a deferral for all of 2016 and 2017, do they to do any corrective remedies? Participant believed they were deferring 8% Roth, but the payroll was only deferring 7%. Basically $15 per pay period difference. Is the link below relevant, or does it not apply because these are Roth contributions? https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-correcting-a-failure-to-effect-employee-deferral-elections
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I have a client who has 401k plan and realized in 2017 plan year that they missed deferrals for a participant in 2015 and 2016 plan year. Now they have calculated missed deferrals and match amount along with earnings. Question is: 1. Can this QNEC amount be included in ADP\ACP test? 2. If yes for above, can 2015 and 2016 QNCE amounts be included in 2017 ADP\ACP tests or only can be included in their respective plan year testing. In this case as they have already completed 2015 and 2016 testing thus these amounts are not included in any testing year, is it ok or IRS has some guideline for the same.
