pam@bbm Posted December 15, 2015 Posted December 15, 2015 A participant elected a 5% deferral to begin January 1, 2012. She just notified her employer that the deduction was never started and she also missed out on the match. It's been 4 years and she never mentioned missing the deduction until now. Does anyone know of a time limit on the correction for the missed deferral?
BG5150 Posted December 16, 2015 Posted December 16, 2015 Does the participant have any proof that her enrollment form was definitely received by the HR dept? Just because she has a copy, doesn't mean the HR dept received it in good order. hr for me 1 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
pam@bbm Posted December 16, 2015 Author Posted December 16, 2015 Not sure if the employee has proof, but the employer does have the enrollment form.
EBECatty Posted December 17, 2015 Posted December 17, 2015 My understanding is there's no "official" cutoff date and that you should correct for as far back as you have records. On a related note, has anyone relied on the provisions sometimes used in salary reduction agreements or other plan docs that say basically "it's your job to confirm your deductions from your paycheck and if we use an incorrect one or fail to implement, you'll be deemed to have elected the amount we use (or $0 if we fail to implement) unless you notify us..." I've seen at least one case where the plan sponsor failed to implement an election that resulted in $25,000+ of missed deferrals over the course of two plan years because the participant never reviewed his pay stubs or account statements.
BG5150 Posted December 17, 2015 Posted December 17, 2015 I think there should be a cutoff: if you filed your taxes for a particular year and you did not notice the error, then tough. hr for me 1 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
EBECatty Posted December 17, 2015 Posted December 17, 2015 I think so too, but it's not my opinion that matters. K2retire and hr for me 2
SFSD Posted December 17, 2015 Posted December 17, 2015 Some participants statements have something saying to the effect that you need to notify us if something is wrong and if you don't we won't go back further than "X" period of time to make a correction. Yes, I know this doesn't address the proper correction method but it could be something to consider in deciding how far to go back. Four years sounds unreasonable, but . . . . hr for me 1
QDROphile Posted December 17, 2015 Posted December 17, 2015 You might get some traction on a cut off under VCP, but SCP guidance does not support a cut off. SCP guidance is not the final answer under SCP, but we don't have much information about how tolerant the IRS is about deviation from the SCP guidance
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