Missed Roth Contributions

[davef]

I realize the IRS is looking for comments on this topic, but I was wondering if others have come up with their own correction methodology where an employee elects to make a Roth deferral but the employer fails to deposit the dollars into a Roth account (i.e., the employee's paycheck was unreduced for any Roth deferral) In the case I'm dealing with, there also would have been an associated match.

We are considering the following approach, with the intent of keeping within the principles of EPCRS to put the person in the same position they would have been had the error not occurred:

1. The employer increases the employee's pay by the amount of the missed Roth deferral and then deducts it from the paycheck as a Roth contribution and deposits it into the plan. All applicable taxes are withheld.

2. The employer makes a make-up matching contribution to the person's match account.

3. The employer contributes an appropriate amount of earnings to both the Roth account and the match account.

4. For ADP/ACP testing and 415 purposes, both the Roth deferral and match would be considered made in the year in which the error occurred.

Any issues I've overlooked?