Automatic enrollment in error

[SusanKD]

A participant in a 401(k) plan with automatic enrollment e-mailed her initial enrollment on 12/18/17 to her payroll department. She requested 3% deferral. The payroll administrator missed the e-mail and auto enrolled the participant at 6%. Payroll was processed on 1/2/18.  So the participant's deferral was 3% more than requested.  The plan does not allow for distributions when opting out of automatic enrollment.  She also received a higher match as a result of the error.

I know what to do if the deferral was missed, but in this case the deferral is too much.  My thoughts are to keep the deferral as processed and make sure payroll is updated.

Thanks for any guidance!

[Larry Starr]

Correct it with the next  paycheck; defer 0% for one check and then back to 3% and you are all set.  Don't overthink it.

Note; if the checks are not the same from period to period, then do the math so you have the right amount over the two pay periods, but otherwise the same concept.

Larry.