Correction of After-Tax Contributions

[luissaha]

A large multiemployer defined benefit plan recently discovered that a contributing employer was making contributions to the plan on an after-tax basis. The plan does not allow for after-tax contributions. Obviously, because the plan document does not allow for after-tax contributions, the contributions must be refunded to the employer. The problem here, however, is that the employer had been making after-tax contributions to the plan for over 8 years before the plan's auditor figured out what was happening. Additionally, the language in the collective bargaining agreement could be read to require that the employer make only after-tax contributions to the plan. As such, if the contributions are refunded, the plan may not have any recourse against the employer under the CBA to collect the contributions and the employeees will not have accrued any benefits under the plan. Does anyone have any ideas on how he plan can resolve this situation without the employees losing the benefits they thought they had accrued? Any help would be appreciated.