Missed Deferral - Catch Up Contribution

Participant enrolled and deferrals withheld and timely deposited.  In September the employee reached $18,500. Payroll stopped his deferral. The  participant was over 50. Due to a  payroll glitch, the catch up contributions were not withheld.  In January the employer realized the error.  They have corrected the payroll issue.

Any action required by the employer for these "missed" deferrals?  The employer does not make a match contribution.  

Sounds like a missed deferral opportunity to me: https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-correcting-a-failure-to-effect-employee-deferral-elections

Some plans/recordkeepers/payroll systems (including my current employer) require a separate deferral election with respect to the catch up amount.

I think it's stupid/illogical and possibly some kind of violation but I have to be careful to go into our online plan portal and enter my "catch up" deferral election after I've hit the basic deferral limit.

Point being you may not have a missed deferral opportunity depending on the plan's requirements for electing "catch up" deferrals.

It never ceases to amaze me how the IRS, DOL and industry practitioners have generally absolved the participant of any and all responsibility with respect to their contributions and retirement accounts. If I'm over age 50 and knowing/expecting/wanting to save more than $18,500 then I'm going to be damn sure my contributions continue.

Or people who elect a contribution change and don't recognize (for months or even years - not a lie) that their contribution (or take home pay) never changed - hello, McFly!

Yes, plan sponsors are responsible to properly administer their plans, but I think participants should incur some responsibility as well, especially if they have received multiple sources (pay stubs, quarterly statements, etc.) that clearly show any errors.

Sorry, just my grumpy Monday rant because the 'Cuse got toasted Saturday at Va Tech and the wrong two teams are in the Super Bowl.

I'm sitting next to you 'Cuse......

This is a missed deferral opportunity and there are stated self-correction procedures under EPCRS (generally requiring an employer QNEC contribution for part of the missed deferral).  See Rev. Proc. 2018-52 Appendix A.05(4), (5), and (9)(b).  Based on the facts provided, this likely falls under (9)(b).

On 1/28/2019 at 1:46 PM, CuseFan said:

Sorry, just my grumpy Monday rant because the 'Cuse got toasted Saturday at Va Tech and the wrong two teams are in the Super Bowl.

HOKIES! HOKIES! HOKIES! ... sorry, just a bit of fun! ;)

57 minutes ago, cheersmate said:

HOKIES! HOKIES! HOKIES! ... sorry, just a bit of fun! ;)

What was with the pink uniforms?

8 minutes ago, BG5150 said:

What was with the pink uniforms?

Really, and I thought Oregon's neon green unis were obnoxious. But they played a great game so I have to give them their props and harbor no animosity to the Hokie Pokies!

I want to know who made the decision that allowed both teams to wear their away colors. Wouldn't have surprised me had a pass or two or three been misdirected.

The pink was for cancer awareness, support as I understand it.

Must admit day glow pink and orange was a bit of a dazzler to watch!