What happens if an employee does not use all the deferrals by the end of the year?
A. Employees have an extended claim period , usually 90 days past the end of the plan year to submit expenses from the prior plan year. Any remaining employee deferrals are retained by the employer as these funds may not, by law, be given back to the employees. Therefore, the employee must budget wisely and conservatively for known expenses and this will not be an issue.