correction of mistake of fact by employer

[Guest Davis McDonald]

In 1999, an employer mistakenly contributed $10,000 to an employee's 403(B) tax deferred annuity. Now the employer wants to recover the monies. Would the Section 403© rules apply to give the employer only one year from the date of the mistaken contribution to retrieve the funds ? (Clearly, qualified plans would be covered by 403© but I have not been able to find anything dealing with this issue in the context of 403(B) tax deferred annuities.) Your thoughts about the answer or where I might go to find the answer would be appreciated. Thanks.

[Belgarath]

I don't work much with 403(B)'s, so only know enough to be dangerous! I'm assuming the mistaken contribution does not represent income that otherwise should have been paid to the employee? So it's just a totally random contribution to the wrong account... I found a reference to General Counsel Memorandum 38992, which says that the nonforfeitability requirement is not violated if the TSA permits a return of contributions made as a mistake of fact. I assume this would apply to the earnings as well.

I've never worked with the TVC program, or APRSC as it applies to 403(B), so don't know if these would help - you might try them.

Good luck!