Missing Enrollment Forms?

[Jilliandiz]

If the plan sponsor, the financial advisor and the participant have all lost their enrollment forms....who's responsibility is it ultimately to keep them? Shouldn't it fall onto the participant?

There is a participant who claims they elected to defer 3% each pay period, and they have noticed now 9 months later, that they are only taking out 2.85%, but there is no proof of the 3% to make any adjustments b/c the enrollment form is missing.

I would think its the participant's fault for losing the forms, not the employer, and tell them they have to wait until the next entry date to complete a new form b/c the plan document only allows changes 1/1 & 7/1.

What do you think?

[Guest Pensions in Paradise]

The IRS and DOL would probably disagree with you, considering under ERISA Sections 107 and 209 it is the plan sponsor's responsibility to maintain records. I don't recall any section which makes it the participant's responsibility.

Disregarding who's responsible for keeping copies of the enrollment form, there are prior threads which discuss whether a participant has some responsibility to notify the employer if the incorrect amount is being withheld from their paycheck.

[RCK]

A wild guess: the problem is with the definition of recognized compensation, not the deferral %. I've never seen a system or a plan that allows for a 2.85% deferral, so I'm guessing that 3% is being applied to a base that is 5% smaller than everyone is expecting (3% of 950 equals 2.85 percent of 1000)

[david rigby]

Yep. Might be a bigger problem: the participants elected to defer a percent (perhaps because that's what the plan says?), while whoever designed the payroll information/deduction did so as a flat $ amount. Uh oh.

[Jilliandiz]

They deferred 3%, but payroll is only deducting 2.85%.

IF all the participants are okay with this, can we just move forward and have them fill out new forms to modify future contributions?

[david rigby]

If the "discrepancy" is in the payroll function, why not fix it there?

[Guest oxdougw]

In a very similar vane, what corrections are necessary where a election change is made to the wrong participant with the same last name.

"A" deferring 2% submitted a form to go to 5% to receive the full dollar for dollar match on 5%. The election was applied to "B" taking them down from 6% to 5%.

It doesn't appear to be a qualification failure so what is the fix?