bonus comp never withheld on for 10+ years

[WCC]

Sponsor provides an annual Christmas bonus to all employees. The plan document includes bonus pay in the definition of compensation. The plan sponsor has never withheld deferrals (and therefore never matched) on bonus compensation. This has been going on for more than 10 years.

What is the correction method?

If I remember correctly a statute of limitations does not apply to benefit calculations.

Is filing a VCP submission asking for relief by retroactive/corrective amendment to exclude bonuses reasonable or even possible? The error applied to all employees HCE and NHCE alike. There was no separate communication given to employees that said bonuses would be excluded. Employees were only given the SPD which said bonuses were included.

Thank you

[K2retire]

I'm working on a similar correction. In our case it was taxable fringe benefits, not bonuses, but the concept is the same.

We suggested a retroactive amendment, but the client's ERISA attorney advised calculating the missed deferral opportunity and missed match as far back as the client can find the records, then submitting it for VCP as a good faith effort.

[khn]

We worked with an Erisa attorney on a case like this who was successful in getting a retroactive amendment approved. It was submitted anonymously first. It would help if you have any kind of documentation or can somehow prove that the intent was always to exclude bonus from comp.