Contingent benefit violation? How do I correct?

[gumbok]

Suppose a plan sponsor had been issuing company stock as a form of match contributions to employees who deferred into their 401k plan. Now suppose the plan document provisions do NOT list this type of match, and the stock certificates were not listed in the name of the plan. Keep in mind that while these WERE match contributions, they were also NOT officially part of the plan.

By offering these employer stocks, has the plan sponsor violated the Contingent Benefits Rule? If so, how can this be corrected, as this type of violation is not listed under the VCP covered transactions?

[Mike Preston]

Interesting. Sounds like precisely what the contingent benefits rule intended to avoid. I would say a regular VCP submission with a suggestion to top-up, retroactively, the stock awards such that they end up being agnostic with respect to deferrals. Might be expensive.

[gumbok]

I strongly agree. Thank you very much Mike. That is an excellent suggestion!