Deferrals not withheld according to participant's election ...

[Spencer]

Due to error by employer (or their payroll service), a participant (NHCE)who elected to defer the maximum allowable under the plan was capped at $6,200 in 1999 (calendar year plan)instead of $10,000. He was not capped due to 415 or document limits - employer just goofed.

Obviously, participant is upset. He also missed out on about $800 in matching contributions.

How does employer make participant right?

Any suggestions will be appreciated.

[Guest]

There's not too much the employer can do, accept maybe give him a grossed up amount to put in a non-deductible IRA. WHy wasn't the participant watching his paychecks to see if the dedcuctions were made or not?

[Kirk Maldonado]

I disagree with DSilver.

I think that you need to make the correction under the plan using one of the IRS approved programs (APRSC, etc.) Otherwise, you are putting the plan's tax-qualified status in jeopardy.