Deferrals Not Calculated Correctly

[Guest DCquestioner]

I'm working on a plan where the total deferrals deposited into the plan do not match the total deferrals withheld on the year to date payroll reports. I'm still trying to get to the bottom of where the discrepancy is, BUT...

Let's assume that the deferrals on the payroll reports are correct per the participants' deferral elections. In this case, more deferrals were deposited into the plan than what the payroll reports show. Can someone lead me in the direction of the proper correction? None of the participants are hitting any limits. The deferrals were just calculated wrong, and too much whas contributed.

Thanks!

[justatester]

The deferrals on the w2's do not match what was posted into the plan? Is it possilbe that you had some cross year contributions?

[Guest DCquestioner]

Not that I can tell. Beginning balances at Hancock tie into the ending balances on last year's val with no receivables reflected.

[austin3515]

If no one is over by much, I would either:

a) Short an upcoming deposit

b) Transfer the over-deposit to the forfeiture account.

Assuming you're talking about "small dollars" (I don't dare define "small"), you have my permission to correct this way

If the balances are larger, and your going with option b) I would still do the same thing, only adjust for gains/losses.

[Guest dbvail]

In an effort to be helpful you can try to figure out what happened (as TPA's we see more versions of this than the client), but at the end of the day it is their responsibility to tell us what numbers they want us to use.

The IRS/DOL person will ask them, not us. So to help, we print a list of discrepancies and ask the client to review their records (week by week if needed), and tell us what amount to use. The adjustments are then clear. Often they find one payroll to be the culprit, often the first in the new year that was coded wrong on the upload (or some variation thereof).

Hope this helps.