California Code of Regulations › Title 2 - Administration › Division 1 - Administrative Personnel › Chapter 3 - Department of Human Resources › Subchapter 1 - General Civil Service Rules › Article 27.6 - 401(k) Retirement Savings Plan › Section 599.946 - Corrective Contributions and Lost Earnings

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) If an employee directed contribution
					 transaction is not processed appropriately causing the employee's 401(k)
					 Retirement Savings Plan account to be underfunded, it is the responsibility of
					 the entity that made the error to make the account whole. This includes all
					 corrective contributions and lost earnings that would have been deposited in
					 the account if the error had not occurred. The entity responsible will also be
					 required to pay $500, per underfunded account, to cover administrative
					 costs.
(b) If contributions made
					 by, or for, an employee under the 401(k) Retirement Savings Plan are not
					 deposited in the employee's Plan account by the date required by federal law,
					 state law, or regulations governing the Plan, the entity responsible for the
					 error must pay all lost earnings that would have been deposited in the account
					 if the error had not occurred. The entity responsible will also be required to
					 pay $500, per underfunded account, to cover administrative costs.
(c) Corrective contributions and any lost
					 earnings as addressed in subsections (a) and (b) above, will be funded by the
					 entity responsible for the error and may not be deducted from or offset against
					 any employee's compensation.
(d)
					 The California Department of Human Resources will determine the amount of lost
					 earnings required to make the account whole.
(e) The California Department of Human
					 Resources will receive reimbursement for the corrective contributions, any lost
					 earnings, and administrative costs through the State Controller's Office in
					 accordance with Government Code section
					 11255. The
					 State Controller's Office and the California Department of Human Resources
					 shall each receive one-half of the $500 administrative fee paid by the
					 responsible entity. If the responsible entity is not a state agency subject to
					 Government Code section
					 11255, the
					 California Department of Human Resources will obtain reimbursement directly
					 from the entity, and shall retain the full amount of any administrative fee
					 collected from the entity.
1. New
						article 27.6 (section
						599.946) and section filed
						10-22-2012; operative 11-21-2012 (Register 2012, No. 43).
2. Change
						without regulatory effect amending section and NOTE filed 10-13-2014 pursuant
						to section 100, title 1, California Code of
						Regulations (Register 2014, No. 42).
3. Change without regulatory
						effect amending subsections (d)-(e) filed 4-18-2022 pursuant to section
						100, title 1, California Code of
						Regulations (Register 2022, No. 16).
Note: Authority cited: Sections
						  18502 and
						  19815.4(d),
						  Government Code; and Article XVI, Section
						  17, California Constitution.
						  Reference: Section
						  19999.5,
						  Government Code.