Correcting 457(f) Plan Error

[waid10]

I thought that there was a program for fixing 457(f) and 409A plan errors but I can't seem to find anything with the IRS. We have an erroneous deferral in our non qualified deferred comp plan. A participant reached their vesting date and should have been paid out their balance in 2021. I am looking for guidance on how to correct.

Thanks.

[Lois Baker]

This might be a starting point: https://www.irs.gov/retirement-plans/issue-snapshot-457b-plans-correction-of-excess-deferrals

[XTitan]

Notice 2008-113 lays out the opportunity to correct inadvertent operational errors under 409A over a period of 2 years from the date of error without imposing full 409A additional income taxes.  Check out https://www.irs.gov/pub/irs-drop/n-08-113.pdf and review either section VI.C or section VII.D depending on the magnitude of the error and make sure the correction is done before year end.  Don't forget to review section IX as well as the IRS will need attachments to the tax forms to describe the error.