SMART Plan HR/CMS Excess Contribution Refunds
For 2007 the Internal Revenue Code limits tax deferred contributions to 457 deferred compensation plans such as the Massachusetts SMART Plan to $15,500 for participants under age 50, $20,500 for participants over age 50, and up to $31,000 for participants utilizing the special 3-year normal retirement age catch-up. If an employee contributes more than the above applicable limits, a refund must be processed and the excess contribution amount must be returned to the participant. Once an employee has been identified as needing a refund of excess contributions, the following steps will assist you in requesting and receiving the excess contribution refund for your employees. It is very important to submit any requests for refunds as soon as possible before year-end; otherwise agencies run the risk of having to issue W-2Cs. 1. Send a request to ING on official letterhead requesting a refund for each employee that is over the 2007 contribution limit. The request should include the employee’s name, social security number, employee number, and the amount of the requested refund. The request can be mailed to CMA Plan Manager at ING, 151 Farmington Avenue, Hartford, CT 06156 or faxed to (860) 723-9636, attention CMA Plan Manager. 2. The Massachusetts Treasurer’s Office has requested that ING receive authorization from its Cash Management Department in Boston prior to processing any excess contribution refunds. Once ING receives your request, ING will contact the Cash Management Department and request authorization to process the excess contribution refund. 3. Once ING receives authorization from the Cash Management Department to process the excess contribution refund, ING will process a withdrawal from the participant’s account in the amount specified by your request and the following day ING will overnight a check to the Cash Management Department of the Massachusetts State Treasury in Boston. 4. The Cash Management Department receives the excess contribution refund check, which is payable to the Commonwealth of Massachusetts. They deposit the check and have a manual check issued, payable to the employee. The new check is forwarded to the agency for distribution to the employee. The Cash Management Department arranges with the Comptroller’s Office for a manual correction to the employee’s payroll history brought about by the refund. The employee’s W-2 is updated by this manual process to increase the total of taxable income and to reduce the total of tax deferred contributions. If refunds occur after W-2s are processed, the employee’s Agency has to provide each affected employee with a W-2C. For questions or information regarding this HR/CMS excess contribution refund process, please contact your local ING account representative at (781) 768-4850 or call the ING MA Payroll Service Center at (877) 4591286.