Leaderboard

Why wouldn't you do it the same way that you do a black out period? You do have to notify employees, but deferrals/match still happen, but just aren't posted until such time as the system is up. It used to be that black out periods were weeks and now they are more like days and no plan documents had to be amended. So I would still take the deferrals and do what ETA suggests.

This is open to interpretation. I would continue to accept loan payments until the participant is actually paid out their plan balance due to the plan termination. The language in the loan program seems to address the issue that the plan will no longer be in existence to collect loan repayments. So, if you have 3 years left on your loan but must pay out all balances within 12 months of plan termination; then the plan will not remain open for purposes of collecting the loan payments. Hence, the loan must be due and payable. I wouldn't lose any sleep over continuing the loan until the balance is paid out. Good Luck!

... and paragraph ©(1)(i)(A), which seems to indicate a PA responsibility to monitor/measure actual receipt of the e-correspondence.

https://www.irs.gov/tax-professionals/enrolled-retirement-plan-agent-frequently-asked-questions FAQ#2

I agree with all of the above. Since I didn't see it mentioned above but the correction to the 3 people will have to include some kind of lost earnings in addition to the contribution. Once again someone at your service provider ought to be telling you this. However, as you can tell from the earliest comments you have a bigger problem then the 3 people. There is a systematic problem that allowed this to happen and not go detected for years. That systematic problem could cause larger issues with the IRS or DOL.

I always interpreted it as meaning that the employee had access to a computer, with email capabilities and an email address, because they needed to use that computer for work. Key here was the "need" for their job. As opposed to someone who may have access to a "community" computer at work.

Happy holidays or extended weekend or whatever you celebrate. Enjoy!

First and foremost, it's not an IRS issue. It's a DOL issue where those amounts are treated (by the DOL) as plan assets as soon as they are withheld from the participants' pay. AND, like any plan asset, the DOL is pretty adamant that they are separated from the employer's general assets (i.e. checking account) as soon as administratively feasible. With that in mind, two reasonable alternatives would be to have the recordkeeping platform to create a single account (e.g. forfeiture or whatever) for the exclusive purpose of receiving the contribution from the employer and holding it until it can get allocated pursuant to each participants' respective investment elections. The platform "MAY" have a lockbox account. Depending on the amount of time, the employer may write a check for the payroll amount and mail it into the platform's lock box. By the time it gets cashed and allocated, the accounts may be set up. Another approach may be for the employer to set up a checking account in the name of the plan for purposes of receiving the deposit. This may be least advisable if we're talking about a delay of a week or less. The thinking is merely to get those amounts separated from the employers assets as soon as administratively feasible. Whatever you do, ensure each participant's account receives the amount that was withheld from their pay. Good Luck!

I'd ask the same Q as 401king, although I can hazard a guess at the answer - your "service provider" (using the term loosely) is probably a large payroll company or other impersonal outfit. Your commentary "After many phone calls and emails...All of this was done without our knowledge. We were not aware they had a cash balance with funds we submitted." is telling. And you figure that trying to get them to actually do anything is about as helpful as poking yourself in the eye with a sharp stick, right? Ultimately, you need to work with them to fix it - it is really on them, although no doubt there was a message waiting on the website for you to read so they will blame you. Ultimately, the answer to your questions is that you need to open or re-open accounts for them and deposit the money to those accounts. It raises questions about timely deposits but that's a different matter.

I don't have your answer - But why is it that your provider cannot correct this for you if it is, in fact, their mistake?

Might be a good time to check your profile, though, to be sure the email address listed there is current. That allows you to retrieve your password automatically should it ever be necessary. And it allows you to be notified of new topics ... and receive any possible-and-rare administrative announcements via email.