We have an employee who was hired in September at a level that is eligible for our deferred compensation plan. Due to an administrative reporting error, the HR department did not receive notice of this person until November. Under 409A, an initial deferral election must be made within 30 days of first becoming eligible to participate in the plan. I don't see anything in the 409A regs that allow for a correction of an administrative error such as this, and I don't think this error is covered by Notice 2007-100. Does anyone have any thoughts on this?

You don't need to feel too sorry for the individual.

Thanks for the reply QDROphile. I don't really feel sorry for him! However, he still wants to make an election for this year - can he do that even though HR missed the 30 day deadline?

Not on my watch.

Agree that nothing can be done for salary, but what about deferring any performance-based comp earned in 2008 paid in 2009 under the transition rules for short-term deferrals?

What is the nature of the error? Could an argument be made that the employee was not offered eligibility in the plan until now, and his 30 days starts ticking now? If the plan says that employees are eligible based on being individually selected and notified by the company or a committee, and no action was taken, even if in error, isn't he now becomming "first eligilble." Any thoughts on the technical analysis of this approach (as opposed to anti-high paid individual comments)?