employer accidentally turned off EE contribution

[Guest fcdeacy]

payroll accidentally turned off someones deduction in 2005, he finally 'noticed' and brought it to employers attention Dec 2006. what is employer liable for?

do they owe him any contribution dollars (matching or otherwise) for the period he wasnt contributing but should have been- as he elected????

he does receive a weekly paycheck and quarterly statements for his 401(k)

thanks so much!

[WDIK]

The following link generally addresses your question. There are also quite a few other threads that broach this subject.

http://benefitslink.com/boards/index.php?showtopic=32240

[401_4_ever]

This is addressed in the rev proc 2006-27 which is the new guidance for EPCRS issues. I believe the new method for this situation is you take the employee's ADP rate for his group (presumably yours is a NHCE) and use that as his deferral rate. You then make a QNEC of 50% of the amount you come up with. You then do 100% match, and the earnings on both of them as well. A self-correct is likely appropriate.

payroll accidentally turned off someones deduction in 2005, he finally 'noticed' and brought it to employers attention Dec 2006. what is employer liable for?

do they owe him any contribution dollars (matching or otherwise) for the period he wasnt contributing but should have been- as he elected????

he does receive a weekly paycheck and quarterly statements for his 401(k)

thanks so much!