Jump to content

Reasonable timing to implement salary deferral election changes?


Recommended Posts

Posted

What is a "reasonable period" of time for a plan sponsor to implement salary deferral election changes?  Plan states that an election to modify a salary reduction agreement "will take effect within a reasonable period following such election."  Typically, election changes would take effect on the next semi-monthly payroll date (i.e. 1-2 weeks). But due to an administrative error election changes made earlier this year did not take effect for up to 12 weeks (i.e., an election change made 1/1 to increase deferrals was implemented 3/31). 

I'm analyzing whether the election changes were not implemented within a reasonable period, resulting in an Election Deferral Failure under IRS rules. Any thoughts would be appreciated.  

Posted
17 hours ago, kmhaab said:

due to an administrative error

That answers your question - it was an error, and not due to some reasonable implementation process (which would, I'd think, be manageable by the second pay period at the latest).  

Ed Snyder

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

Terms of Use