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OVer-deduction of 401(k) deferrals


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Guest rocnrols2
Posted

Company X sponsore a 401(k) plan. Participant A has elected to make 401(k) deferrals in the amount of 5% of compensation, which is contributed during each pay period. After the payroll has been run and A has been paid, Company X discovers that during the pay period, 6% of compensation was deducted from A's most recent pay period. How does Company X correct this situation?

Posted

Others opinions are likely, but I suggest a 4% deduction in the next pay period. The 5% in subsequent pay periods.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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