Error prevents me from maxing out 401(k) "50+" catch up

[Will]

I haven't posted here in forever so I thought I would post a frustration:

I had everything all set up so that my 401(k) would be fully funded with the contribution from my last paycheck of 2015.  Since I am aged 50 I am allowed to contribute $6000 on top of the usual maximum of $18000 for everyone.  When I get my last pay though it is $552 higher than I was expecting because the last contribution did not go.  The company payroll is all through ADP.  I call ADP on 12/22 (the day we got paid) to find out what happened.  "We'll have to research that and get back to you."  Nothing heard on 12/23 or 12/24, so after the Christmas weekend I call back.  ADP says it wasn't their fault, it is Merrill Lynch's fault, call them.

Almost deja vu. Merrill Lynch: "We'll have to research that and get back to you."  Well, hey, the year is almost over, and I would hate to miss out on this last $552 contribution, so I also call my company.  Deja vu all over again.  "Research, get back to you, blah blah."

Merrill Lynch calls on 1/5.  They tell me to call the Payroll Manager for our company.  I do and am told ADP had the wrong limits keyed in so it appeared that I had maxed out even though I hadn't.  And now that it is 2016 the books have been closed so there is nothing anyone can do.  I am then told that I was the only one affected by this error because no one else was close to maxing it out, just me.  "Well, hey, you contributed $23,448.  That is more than anyone else in the company!"  Umm, yeah, but it should have been $24,000.  Through no fault of my own and unfortunate timing due to holiday closures, I get the short end of the stick.  Tax deductions and contributions to retirement accounts are hard to come by, and I wasn't trying to be the biggest contributor for bragging rights.  I want to retire!

[jexy103]

Will, that sucks, I'm sorry to hear this. They can't backdate it to the date it was supposed to have gone in? The federal government can with the TSP (federal version of 401(k)). I was disappointed in myself last year- I missed maxing out by almost $500; completely my own fault though, just miscalculated.

[PhrugalPhan]

Yeah, what they're saying is they won't fix it, not that they can't fix it.  I'm sure the IRS would allow the fix if your employer / plan administrator would go to the trouble.  This link is for other issues, but it makes it sound this could certainly be corrected.  https://www.irs.gov/Retirement-Plans/401%28k%29-Plan-Fix-It-Guide-You-have-not-timely-deposited-employee-elective-deferrals

[Will]

Yeah, what they're saying is they won't fix it, not that they can't fix it.  I'm sure the IRS would allow the fix if your employer / plan administrator would go to the trouble.  This link is for other issues, but it makes it sound this could certainly be corrected.  https://www.irs.gov/Retirement-Plans/401%28k%29-Plan-Fix-It-Guide-You-have-not-timely-deposited-employee-elective-deferrals

Exactly, and that is the part that sucks.  I am trying to decide if it is worth going higher up the chain than the Payroll Manager to force them to do it.  It isn't like I am asking them to put in their own money.  Please, take $552 from me and put it in my account!

[Dee18]

I had the same thing happen...although my employer erred by $6000.  I didn't notice until Dec 31 when I received my payroll statement.  I emailed my employer and they reversed the last paycheck and made the $6000 deposit to Fidelity.  So your employer certainly can do it.

[Nickels Dimes Quarters]

I would definitely ask them to get that contribution into your account. If there is a penalty fee for being late, the company should be glad to pay that since it was not your fault.

You really have nothing to lose and frankly, the higher ups should know this happened so that it doesn't happen again.

NDQ