Employer match posted as employee deferral

[Guest Quacka]

Employer match of ~$250.00 in 2011 was posted to employee deferral source due to payroll processing error. Employee reached 402(g) limit with other deferrals, so the erroneous amount was reclassified as catch-up in recordkeeper's year-end testing software. Employee was catch-up eligible but did not make a catch-up contribution election.

Employer match is made in company stock. Participant is eligible to diversify out of company stock. Participant directs investment of employee deferrals into various mutual funds. Company stock performed better than mutual funds.

How to fix this? Should the amount be transferred from catch-up source to employer match source in 2012? Earnings/make-whole issues?

[Jim Chad]

FWIW I think the earning are Ok and do not need to be fixed. I would simply reclassify the current value of this money as Match.