"New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans. Specific plans that New Jersey does not allow taxpayers to exclude contributions to include, but are not limited to, plans under I.R.C. § 403(b), I.R.C. § 457, 409A, I.R.C. § 414(h), SEP, Federal Thrift Savings Funds, or Individual Retirement Accounts. Employer contributions to these plans receive tax-deferred treatment. In addition, both employee and employer contributions to SIMPLE IRAs, SEP, and SARSEP plans are included in taxable wages (neither receive tax-deferred treatment).

"I came to learn of this through work on 457b plans. I had no idea how extensive their bizzarness was, including employer contributions to SIMPLE IRA's and SEPs. I am posting here because they do not even allow deductions for 403(b) Plans. This is really insane. Are people aware of this??"

"Through a convoluted series of events one of our participants was overpaid a (to me) substantial amount in the prior plan year. Without going into detail, both our recordkeeper and our participant share responsibility for the error but I believe the participant was slightly more at fault. The recordkeeper made a number of attempts to reach out to the participant but one repayment transaction was rejected by their bank and now the participant is no longer responding to requests to discuss. No action has been taken by the recordkeeper other than the various attempts to contact. To make it slightly more interesting, the offending transaction was an in-service withdrawal so they remain an active employee so there are HR considerations as well as legal ones. There is some unrelated evidence that they are in serious financial difficulty.

"In response to my oft-expressed concerns that our accounting now shows a negative balance, the recordkeeper made the business decision to make the Plan whole by paying off the negative balance. Of course I am grateful for this (and appreciate that the recordkeeper is a very ethical organization) but I am troubled by the fact that so far this participant has gotten away with a large sum of money. It appears that the recordkeeper has made the business decision not to take any more steps to recoup, as the expense of trying to do so might exceed the recovery.

"This is all still evolving and I believe our options are all still open. I have not yet involved legal counsel but am heading in that direction. I believe that, legally at least, the recordkeeper's attempts to recoup from the participant and their decision to make the Plan whole meets the requirements for correction and now that the Plan is whole we are OK from a legal standpoint but I am still troubled and looking for thoughts from people who may have experienced this somewhat unusual situation."