We have a new employer client, who has a simple ira in place. In comparing payroll withholding to deposits to the various participant vendor accounts, we noticed that the employer/owner (this is a small firm, one owner, three other employees)failed to make a simple deposit for herself and one employee in May of 2012.

The funds were withheld from the paychecks, just an oversight in sending funds to the vendor.

The employer will be making the missing contributions. We are helping the owner determine how much additiional to credit to each of the participant accounts, to make up for lost earnings.

Would like any input on parameters or safe harbors for how to determine “missed earnings credit”. Would also enjoy any input on whether this can/should be deemed to be employer contributions, as I’m not sure how to show it as a credit for lost earnings.

Any input?