2008-113

[Guest Mel Kiper Jr.]

Employee becomes eligible to participate in an account balance Deferred Comp Plan mid way through 2010. Never was eligible to participate previously.

Elects to defer 10% of salary (so a deferral every two weeks).

Due to admin error, the deferral is not implemented. This is just discovered. A total of $10K would have been deferred.

Would you correct under these circumstances? Will be painful to calculate interest. Or, gross-up employee for 409A tax and premimum interest?

Also, if you correct under 2008-113, is that good with California?

I bet we pay a lot of $$ and expend a lot of effort to follow 2008-113. However, if we report a violation and the 409A tax is paid, is that an invitation to a 409A audit?

Thanks!