Simple IRA Employer match –NOT

We have a client whose employer has not made a matching contribution for at least 6 years. The employer is trying to bargain with the employee as to how much to match (now he has been caught by the employee). Does anyone know what the penalty is for employer for non compliance? Any examples? Thanks



This appears to be covered under Failure # 5 on p. 20 here:

http://www.irs.gov/pub/irs-tege/simple_fixit_guide.pdf

It needs to be determined if the error falls into the “insignificant” category eligible for self correction or not. Generally, the solution is to make up the retroactive matching failure with an estimate of appropriate earnings.

While this may well already not qualify for self correction (SCP), whether other employees are also affected may be material to that determination.



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