Double Deposit of 401k Deferrals

[Guest BrettNH]

In 2007 the employer accidentally submitted several payrolls twice resulting in an over deposit of the 2007 deferrals. Can they remove the excess deferrals from the EEs accounts place into forfeiture account and then reallocate as a PS contribution at year end?

Other options?

[WDIK]

Just to clarify, is it accurate to say that they didn't withhold the deferrals twice, just deposited the original deferrals and then made an additional deposit that was equal to that amount?

[BG5150]

In 2007 the employer accidentally submitted several payrolls twice resulting in an over deposit of the 2007 deferrals. Can they remove the excess deferrals from the EEs accounts place into forfeiture account and then reallocate as a PS contribution at year end?

Other options?

That would not be a forfeiture to be reallocated. It is not unvested money.

I believe (read: me and maybe one or two others here):

The money should be removed from the accounts and put into a suspense account (which the forfeiture account often serves as). Then funds can then be used to offset the next ER's contribution. And here's where it get's controversial: I think they can be used to offset, yes, further deferrals. That is not to say they aren't deducted for EE's paychecks, but the ER can offset the deposit by the amount in the suspense account.

[Below Ground]

I agree with BG5150. I think use of "forfeiture account" is just semantics, and has no real impact. Of course, our world is a world where words do matter.

[Guest BrettNH]

Just to clarify, is it accurate to say that they didn't withhold the deferrals twice, just deposited the original deferrals and then made an additional deposit that was equal to that amount?

YES it was NOT withheld twice, only deposited twice.