Participant Deduction Accidently Stopped on Payroll

[coleboy]

A participant recently noticed that no 401k deductions had been taken out of his paycheck since June 2013. He had elected to have 3% taken out. After checking with the payroll company, it was discovered that the payroll rep had accidently stopped his deductions.

Accordingly, calculations are being done to correct the missed deferrals for 2013. The question that was raised was does the employer have to make up the deferrals that weren't done during 2014 even though the participant could still contribute enough to make up his 3% pay for 2014.

The plan has a safe harbor match. Any replies wll be much appreciated. I am just getting back into administration after being out of work for over a year!

[Bill Presson]

Yes, the employer has to contribute 50% of the missed deferrals and 100% of the match.

See page 30

http://www.irs.gov/pub/irs-tege/401k_mistakes.pdf