deferral basis

[Guest Moira]

A plan sponsor had their payroll system set up incorrectly for much of 2012 and withheld Roth deferrals on net compensation instead of gross compensation. Roth deferrals are, therefore, slightly less than they should be. Plan has a 3% safe harbor non-elective contribution so employer contributions are correct.

What does the plan sponsor do to correct this?

[rcline46]

It is time to become familiar with Revenue Procedure 2008-50.

[Guest Moira]

It is time to become familiar with Revenue Procedure 2008-50.

I have referenced this document in the past but I believe this situation is different. The plan sponsor has not really failed to follow the plan's provisions properly, she was implementing the participant's deferral election properly (both percentage and method) just used an incorrect basis of compensation in her payroll system. Is there a specific section of this document you would send me to that would address this particular issue? Or would you say I am viewing the situation incorrectly and this, then, is an operational failure?

[BG5150]

Look to EPCRS, Appendix A, sec. .05 (5).

It's a failure to implement an employee election. She said take 5% of my [eligible] pay. The ER took 4.89% of her [eligible] pay.

[Guest Moira]

Look to EPCRS, Appendix A, sec. .05 (5).

It's a failure to implement an employee election. She said take 5% of my [eligible] pay. The ER took 4.89% of her [eligible] pay.

Thanks. I appreciate it.