Correcting a Multi-Year Employer Match Error in a Deferred Compensation Plan

A Fortune 500 telecommunications manufacturing firm discovered that the employer match it was contributing to deferred compensation plan participants had been calculated incorrectly over an extended period of time.

This error affected company executives as well as highly compensated employees and created taxation issues for each affected individual.

SBA recommended and delivered the following scope of services:

• Created a data request for the deferred compensation administrator
• Gathered plan documents and developed a detailed calculation summary
• Consolidated historical and current participant data
• Analyzed the data, identified all affected employees, and the time frame of the error
• Created a detailed worksheet showing the correct calculation for each affected employee
• Directed the administrator on required corrections
• Provided a call center to answer affected employees’ questions and walk them through the worksheet
• Created participant communications materials
• Provided data to the client’s payroll department to assist with W-2 tax corrections

The employees affected by the plan calculation error were understandably upset about the multi-year issues with their W-2 earnings.

With SBA's help, client resources were able to focus on their day-to-day responsibilities and leave the difficult discussions to SBA's professional, highly experienced analysts. The client reported that having an independent, facts-based approach to the problem helped build confidence that the error was dealt with and would not recur.