Jump to content

Wrong Contribution what to do with interest


PFranckowiak
 Share

Recommended Posts

Under the approaches given, I wonder if they would be the same under a deferral only plan with no provisions for other types of Employer Contributions.  In the entire universe of plans, I would imagine this has happened in such a plan more than once.

One could just as easily argue that the assets are ERISA protected and may not leave the plan, other than for the exclusive use of providing the benefits (as defined under the terms of the plan) to the participants and their beneficiaries.  This would suggest that, whatever is done, the best approach would be to seek alternatives that leave those amounts in the plan. 

When it comes to attempting to defend an operational failure as a mistake of fact, one could discredit this as easily as any other method.

At the end of the day, it all boils down to a list of alternatives and the risks of each; and the ability to defend the method used as reasonable.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

Link to comment
Share on other sites

On 5/16/2017 at 9:36 AM, RatherBeGolfing said:

That makes sense since it isn't actually forfeiture, just an unallocated account. Which would also be why it cannot be used for fees...

Thanks!

Ironically, I'm being told by a large record keeper that an unallocated account can only be used for fees -- not contributions.

Link to comment
Share on other sites

22 hours ago, K2retire said:

Ironically, I'm being told by a large record keeper that an unallocated account can only be used for fees -- not contributions.

Like BG, I suspect they are referring to a specific unallocated account, not all unallocated accounts.  6.06(2) is pretty clear that the unallocated excess contributions must offset contributions, and that no further contributions can be made until exhausted.

Quote

6.06(2)

...unallocated account established for the purpose of holding Excess Allocations to be used to reduce employer contributions in the current year and succeeding year. 

 

 

 

Link to comment
Share on other sites

Just now, RatherBeGolfing said:

Like BG, I suspect they are referring to a specific unallocated account, not all unallocated accounts.  6.06(2) is pretty clear that the unallocated excess contributions must offset contributions, and that no further contributions can be made until exhausted.

 

Nope -- it was from reversing an incorrect contribution deposit.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...