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Mistake of Fact--what to do about earnings?


BG5150
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Participant in plan elected to stop deferring, but the company kept up the deductions.  The company has made her whole through payroll.

We are correcting this as a mistake of fact.

What happens to the earnings?  The participant shouldn't keep it as a windfall.  (This participant is an HCE and Key EE)  I don't think the company should receive it either.  Do I put it into the forfeiture/suspense account?  Deferrals are the only contributions in the plan.  I wouldn't want to reallocate the $200 as a PS as it will result in tiny amounts for people who don't even have accounts.

Your thoughts are appreciated.

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If the investment gain on the mistaken contributions goes not to the employee, not to the participant, and not to the employer,

what do BenefitsLink people think about crediting that investment gain to the retirement plan trust’s plan-expenses account?

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12 hours ago, Peter Gulia said:

If the investment gain on the mistaken contributions goes not to the employee, not to the participant, and not to the employer,

what do BenefitsLink people think about crediting that investment gain to the retirement plan trust’s plan-expenses account?

We would do that in a heartbeat.

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