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You correct by issuing the 1099-R. No, its not ok to just let it go.

So are we to understand the jokes go like this: What is 2+2 equal? Actuary: What do you want it to equal. Attorney: If I am being paid I have some interesting things to say about those numbers. If I am not being paid it is 4.

I thought about this some more. the whole thing smells. and smells real bad. oh, an owner quit and now we want to retroactively amend the document to conform what took place in which the owner was 'accidently' provided a contribution. The company doesn't run the cross testing, it is the TPA or whomever, and apparently it was discovered that the owner won't get anything, so now lets go ahead and give him something. (instead of rerunning the test how it should.) and let's call it a correction under -11g and to be fair we will give to the nhce terminees as well. we never gave terminated NHCEs in the past, but then we never had a terminated owner either. arguing they can pass all the mathematical testing reminds me of the comment made by the IRS in regards to cross testing in general Although these designs may allow the plan to satisfy the vesting or numeric general tests for nondiscrimination and the associated regulations, they don’t satisfy Treas. Reg. Section 1.401(a)(4)-1(c)(2), which requires that the provisions of Sections 1.401(a)(4)-1 through 1.401(a)(4)-13 be reasonably interpreted to prevent discrimination in favor of HCEs. so is it a reasonable interpretation to say this flies? lets see, we give an owner $40,000 or whatever and give terminees who probably have minimal comp a 5% contribution and because mathematically it works out, it is ok. dang, might as well have a document that reads in no year terminees will receive except in a year in which it is an owner and then all terminees receive. (Could you at least have said, oh I didn't see that the owner is past NRA and those folks do actually get a contribution) bet you would have problems getting that document approved. or taking it a step further if it was a MP plan at 5% would you say it is ok to retroactively amend to 10% to all and call it a corrective amendment because that is how we ran the allocation?

A document can be signed and executed after the effective date. You can sign a Profit Sharing Plan or ESOP on 12/31/2017 to be effective 1/1/2017 for example. My understanding is you can't sign a 401(k) plan on 12/31/2017 and have been putting deferrals into the plan all year long. The document has to be signed before deferrals can be put into the plan. You also can't sign the document in 2018 going back to any time in 2017. So the exact timeline and type of contribution is important. If you want to give the exact dates the attorneys on this forum ought to be able to give you better answers than mine. I am pretty sure in my answers although.