Leaderboard

Ah ha! That is the customary reason for these issues. The trustee has to be informed that he has no right to withhold the payout because of an external issue between the employee and the employer. The trustee is a fiduciary to the plan; he cannot act as an agent of the employer even if he IS the employer. The trustee needs to proceed with regard to this participant as if the dispute was non-existent, and failure to do so can make him PERSONALLY responsible for the violation and lots of other legal problems. I tell my clients (in situations like this) to just hold their noses and do what they are required to do - pay the individual.

this is the area (415 issues) the IRS agents (at least at one ASPPA Conference) concluded made no sense. supposedly you would count the 2017 contribution toward the 2018 415 limit because it was made after 10/15. But if you wait until 2019 to make the contribution (corrective contribution for 2017 under EPCRS) then it counts toward the 2017 415 limit. And of course, if someone quit in 2017, they are due the safe harbor, but would have no comp in 2018, so no 415 limit, which means no contribution! so the 'rules' for 415 limit make no sense in regards to this area.