Missed 2021 match for one person--do earnings?

[BG5150]

Employer deposits match and a "profit sharing" each pay period for everyone (who is supposed to get each).

They missed one guy for a couple payrolls in 2021.  (Deferrals went in fine)  They deposited the missed contributions the other day.

Given that the contributions need to be deposited by the time they file their taxes, do I need to bother withy earnings?

(Let's assume the taxes weren't filed yet)

[Bri]

I like the argument that "getting your amounts early" is a benefit/right/feature.  So if you miss one NHCE you probably still pass coverage on it.

[C. B. Zeller]

Does the plan document say that match and "profit sharing" (why is this in quotes?) will be deposited each pay period? If so you have an operational failure due to failure to follow the plan document, and you can self-correct under the terms of EPCRS - which requires earnings.

If the plan document doesn't say that contributions will be deposited each pay period, then I think you should still consider whether you have a potential 401(a)(4) issue, taking into consideration that the right to earnings on contributions is a benefit, right or feature that has to be available on a non-discriminatory basis.

[CuseFan]

And whether or not taxes have been filed is irrelevant regarding the make-up of lost earnings as I do not believe such is deductible.

[Luke Bailey]

On 4/6/2022 at 11:13 AM, BG5150 said:

Employer deposits match and a "profit sharing" each pay period for everyone (who is supposed to get each).

They missed one guy for a couple payrolls in 2021.  (Deferrals went in fine)  They deposited the missed contributions the other day.

Given that the contributions need to be deposited by the time they file their taxes, do I need to bother withy earnings?

(Let's assume the taxes weren't filed yet)

Even if the plan document does not require payroll date deposit, if you contributed on a payroll basis for everyone else and not doing so for this one participant was an error, I think you would probably owe interest (at least in the DOL's view) to correct your breach of the fiduciary duty of care.

[Peter Gulia]

Consider also that paying over some reasonable measure of interest or time value of money might be needed to correct whatever prohibited transactions might have resulted from the employer keeping (and having the opportunity to use) money that in good conscience belonged to the plan.

[BG5150]

On 4/6/2022 at 12:47 PM, C. B. Zeller said:

and "profit sharing" (why is this in quotes?)

It's a 403(b) plan.  Not really "profit sharing".

UPDATE:  they paid him the $7 in earnings.