415 excess - 8 cents

[fiona1]

Is it necessary to issue a check to a plan member if they went over the 415 limit by 8 cents?

[Bill Presson]

Is it necessary to issue a check to a plan member if they went over the 415 limit by 8 cents?

Why don't you just forfeit it?

[fiona1]

The plan matches 50% up to 6% of pay. This member made $8,300 and 6% is $498.00. They deferred $8,041.08 and got a match of $259 - making their annual additions $8300.08.

According to the EPCRS, you're supposed to refund unmatched deferrals first. I didn't think you could forfeit the match before refunding any unmatched deferrals.

You're saying it's okay to just forfeit 8 cents of their match? The plan sponsor matched correctly.

[Tom Poje]

if you are lucky the person is catch up eligible and therefore can keep the 8 cents.

[fiona1]

Unfortunately they are not catch-up eligible.

In Section 6 of the EPCRS (2008-50) there is information regarding small benefits ($75 or less) and small overpayments ($100 or less) that don't need to be made. Sal says that the $100 de minimus applies to 415 refunds. However this section in the EPCRS states that even though you don't have to issue the refund, the amount is not eligible for favorable tax treatment.

So if this member were to rollover all of this money, they can't rollover 8 cents of it?

[Belgarath]

Speaking on a strictly personal level, I'd take the risk and roll over the 8 cents. Maybe you can pass it off as a rounding error?

[Bill Presson]

You're saying it's okay to just forfeit 8 cents of their match? The plan sponsor matched correctly.

I'm saying that your time involved in typing the message and replies is worth a lot more than $.08 and forfeiting it will be very unlikely to cause any issues with the plan.

Is it 100% accurate; probably not. But it's what I would do and I'm usually a real stickler for doing things right.

[Jim Norman]

Ignore it.

[K2retire]

Every Federal tax forms permits you to round to the nearest dollar. For 8 cents the nearest dollar is zero.