401(k) deposit different than W-2

[Guest EPS2]

Safe Hargob 401(k) Plan for calendar year end 2008

W-2 form reports $1536.90 as 401(k) deferral

401(k) deferral deposited into investment account $1626.10

$89.20 excess deposited into 401(k) account.

EE has since been paid out his deferral , so he was paid out too much.

What do we do now?

The plan still needs to receive the PS and SH Match which will be deposited sometime before April 15th.

The terminated participant is still due about $700.00 in SH match ...should we tell the employer to deposit $610.80 for that employee with the justification that he has already received 89.20 of it? The terminated participant is not a highly or related to a highly.

I don't see anything in the document that addresses this issue.

Any guidance would be appreciated.

Thank you.

[Jim Chad]

I would check to make sure that the $89.20 wasn't from a prior year.

If it wasn't, than I would talk to the accountant and recommend what you suggested..... Treat it as if he has already received $89.20 of the SHMAC or PS.

[BG5150]

I would check to make sure that the $89.20 wasn't from a prior year.

If it wasn't, than I would talk to the accountant and recommend what you suggested..... Treat it as if he has already received $89.20 of the SHMAC or PS.

I would consider it SHMAC, since it's 100% vested as are deferrals.

[Below Ground]

Perhaps avoid immediate payouts?

[PLAN MAN]

I would check to make sure that the $89.20 wasn't from a prior year.

If it wasn't, than I would talk to the accountant and recommend what you suggested..... Treat it as if he has already received $89.20 of the SHMAC or PS.

First, determine what the $89.20 represents. Is it a deferral that should have been allocated as of the previous year? Is there a discrepancy between how payroll is accouting for salary deferrals on the W-2 and how you are record keeping them? Did the employer make a mistake? I don't see how you can assume it is an overpayment and not determine the cause.

[Guest EPS2]

I would check to make sure that the $89.20 wasn't from a prior year.

If it wasn't, than I would talk to the accountant and recommend what you suggested..... Treat it as if he has already received $89.20 of the SHMAC or PS.

First, determine what the $89.20 represents. Is it a deferral that should have been allocated as of the previous year? Is there a discrepancy between how payroll is accouting for salary deferrals on the W-2 and how you are record keeping them? Did the employer make a mistake? I don't see how you can assume it is an overpayment and not determine the cause.

thank you all for your responses:

Yes. We have already determined that it was indeed an error on the employer's part because they simply made a mistake when issuing the check to the investment company. I apologize for not making it clear that is was already determined an error.

We contacted the client to make sure they have put into place a procedure so that this doesn't happen again. This is a brand new plan (first plan year was 2008), and the person that the employer put in charge just really made an inadvertent mistake.

Considering that it involves a non-highly, and the amount of the error was not significant in relation to the whole scope of the things ...we are leaning towards applying that amount as the SH match.