Pammie57 Posted September 19, 2017 Posted September 19, 2017 In a safe harbor 401k Plan, the plan sponsor failed to withheld deferrals on bonus checks. They realized the error the next week. Since it was caught so early, are they allowed to just let participants make up their missed deferral on the next check. If a participant chooses not to make it UP - do they have to get something in writing and do they still have to fund the match that would have been related to the missed deferral? Need some advice! Thanks
WCC Posted September 19, 2017 Posted September 19, 2017 see Rev Proc 2016-51. The match amount needs to be funded. No QNEC for the deferral is required - if you follow the Rev Proc. Pay close attention to the notice requirements. To use this correction method a notice must be given to the affected participants within 45 days. The notice must contain the items listed in the procedure. The notice needs to tell them how to adjust their future deferrals to make up for the error - if they so choose.
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