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There are two things that have gotten confused since the grace period came about 6-7 years ago. Prior to that time there was a "run out" period. It was a time that allowed participants to submit reimbursement requests for expenses incurred during the earlier plan year. Sometimes it was only 30 days, but could be as long as 75 days. So for a 2012 calendar year plan, participants could submit claims until March 15, 2013. The claims had to be for expenses incurred during 2012. Then the grace period was introduced. Unfortunately the time frames for both items were often exactly the same. It was possible to add an additional time frame for an additional run out period after the grace period, but no adminstrator wanted to keep the books open that long. So a grace period (and this DOES have to be in the plan document) allows a participant to make an election for 2012 and use that money for expenses incurred from January 1, 2012 until March 15, 2013. So, the key issue is often making sure an expense in January 2013 is reimbursed from the proper account. It SHOULD be paid from any 2012 money remaining, but sometimes the accounting isn't done correctly. This is very possibly what has happened. I'm sure it is also some confusion between grace period and run out period. Hopefully, this gives you enough to go back and work through the plan years and reach the correct amount. Under no circumstances should you have amounts still sitting in prior years accounts. It should be forfeited and retained by the employer. But make sure you've accounted correctly.

I guess I'm old school, but I miss the days when as a TPA our focus was on our client and how to help them with their retirement plan needs. It seems that has all but faded away. We deal with brokers, not clients. The platforms use participant money to pay for TPA "conferences". TPA firms use platforms as "sponsors" in their advertising and promotional and even charity events. Is it unrealistic to think I could find a firm who wants an experienced administrator who wants to work for the client and not for the platform? Thanks for letting me vent.

Focus on DB/CB and other sophisticated plan designs, not 401(k) plans. Non-producing TPA shops' 401(k) business is more and more at the mercy of the vendors and advisors, many of whom will not hesitate to throw the TPA under the bus over fees or whenever something goes wrong, regardless of the cause. Don't blame the TPAs, they are at the end of a very long tail just trying to hang on. Most plan sponsors won't pay the full price of what it takes for 401(k) compliance and recordkeeping, the advisors control the relationship (and have used 408(b)(2) fee disclosure to further beat up on TPAs). In the 401(k) world it is a race to the bottom and in this world the Paychex-type providers have the advantage They have huge distribution so they can afford to lose the small percentage of clients who will get audited and tagged for non-compliance, and they contract away their responsibility for compliance with ERISA or the IRC, (read their contract, it is right there in Section 7) - they just process what is sent to them.

yes. oh, you expect details? it could occur in cases in which you have HCEs who are younger than an NHCE, and the HCE receives a smaller contribution. years ago I worked out the following example (using 1983 IAF). at 8.5% HCE2 would have no one in the group but at 8% he just gets an NHCE in the group. who age % at 8pct at 8.5pct HCE1 59 20% 3.325 3.393 HCE2 43 6% 3.421 3.755 NHE1 45 7% 3.422 3.721 NHE2 41 5% 3.3303 3.680 e-bar for the HCE at 8% is 3.421 and the NHCE is 3.422! that was from the 2007 ASPPA talk. Otis Redding put in a cameo appearance and sang "Sittin in a 401k" Sittin' in a lifestyle fund I'll be sittin' when retirement comes Automatic enrollment kicked in The default investment's a sin I'm sittin' in a 4-0-1 k watchin' the funds roll away Sittin' in a 4-0-1 k wastin' dimes. The fees they seem to gorge-ya Nothin' changed under P-P-A The returns are really poor Looks like nothin' gonna come my way I'm sittin' in a 4-0-1 k Watchin' the funds roll away Sittin' in a 4-0-1 k Wastin' dimes. Looks like nothin's gonna change Everything still remains the same I don't know just what the funds will do The amount always remains the same I'm sittin' here resting my bones There ain't enough to take any loans two thousand lies on the phone just to make this investment my home I'm just sittin' in a 4-0-1 k watchin' the funds roll away sittin' in a 4-0-1 k wasting dimes.