incorrectly calculated match

[K2retire]

Client changed payroll companies midyear. In the transition, their excluded compensation did not get communicated correctly to the new payroll provider. As a result, the year end census (used to calculate the match) overstated compensation for a number of people. This was not discovered until after the match was deposited.

Because of the impact that a correction will have on morale, the client is hoping to only correct those people who received more than $50 more than they should have received. However, 4 members of the plan's advisory committee who are involved in making this decision have asked that their accounts be corrected even though it would be less than $50. Two of them are HCEs, two are NHCEs.

Some of the people with really small amounts, end up with significantly higher match percentages. There are HCEs and NHCEs in both the group that they propose to correct and the group the propose to not correct.

I see lots of possible issues here. ACP passes with or without correction. I'm thinking of telling them the must correct for all the HCEs, regardless of amount, and for NHCEs whose percentage is more than some (as yet undetermined) amount higher than it should be.

What is a reasonable de minimus amount for a situation like this, given that the error is in the participants' favor?

[Mike Preston]

I'd run it by an ERISA attorney, but why not an amendment now that conforms the document to the match actually made?

[K2retire]

The amendment would end up reading something along the lines of "for the period January 1 through July 10 compensation excludes all bonuses and commissions. For the period of July 11 through December 31 compensation excludes some bonuses and commissions, but not all of them." Somehow that doesn't seem likely to be effective.

[Mike Preston]

Instead try a more targeted approach, such as "The match for 2014 shall not be less than the following: Participant A - A%; Participant B - B%...etc."