JKW

@CuseFan the plan Top hat -and is changing the compensation minimum to participate and the person is below that limit. So sounds like he can keep the balance but not contribute in future. Thanks for info.

I have a 457b plan that is changing its eligibility going forward. And one of the current participants will no longer meet the criteria. Can that participants still contribute and keep balance in the plan b/c he met eligibility previously?

Nothing is stated in the plan to do this, which is why I thought it odd. Thanks for the insight.

I have a plan that sometimes runs into participants checks being lower than their 401k deductions. So for example the check is $50.00 but they have $75.00 as their deferral election. Are they supposed to then withhold the other $25.00 in a future check? We have two different opinions here and trying to find some back up.

I have a plan that had a missed deferral opportunity for a rehire and made the correction and lost earnings. On the Sch H of the 5500, it does not seem as I should put it as a late deposit b/c it was not withheld and then not submitted. But just wondering how others are reporting. Thanks in advance.

I didn't know if we needed to reamortize the loan going forward. And have them resign. Or if there were any other correction methods that were required.

We have two loans that were taken with an incorrect interest rate, the plan uses the prime rate plus 1%. The prime rate had changed but the loans were taken at the old loan rate. I am looking for a correction procedure to fix the loans in question but cannot find one. Do we need to re-amortize these loans at the correct rate? Any assistance would be great.

Thanks all.

Hello. A plan sponsor erroneously put in a stop date in payroll system for a participants loan. Last loan payment September 2017. This loan is past the cure period of December 31st. The loan is set to be re-amortized over the terms of the loan. But do they have to file through VCP or can they just self correct since it is within two years?

They are starting the deferrals now. So they will mat the 25% qnec for 2016 and 2017. When we calculate the earnings - its it based on the 18,000 that should have gone in or the qnec amount?

Due to an error in the clients payroll system, a participants deferral was not taken for the plan years 2016 or 2017. They received their 3% SHNE, which was the only employer contribution. With the new 25% corrective contributions, can they still do this? I just want to make sure when it says "the last day of the second plan year after the plan year in which the failure began (which was 2016) - so that would be by 12/31/18 correct?

Hello All. I have a few plans that receive a letter from the EBSA notifiying them of the VFCP corrections process since they reported late deposits on their 5500. These plans caught the error early and made the lost earnings deposits(self-corrected). Do you typically respond to this letter? I just called the EBSA and they just said it was to notify the plan only, but don't respond unless they want to go forth with using VFCP. Just wanted to know what others did? Thanks.

Thanks.

A small plan just discovered an error in which they did not make their 2015 safe harbor and profit sharing contribution. They took the deduction and tried to process the contribution but the submission never went fully through so the money was never withdrawn from their account. They obviously already filed their 2015 tax return and may have already filed 2016. Is the only way to fix this amend the tax returns and not take the 2015 deduction or can they document the attempted the submission?

Hello. I have a plan that forgot to withhold 401k on an extra payroll run for 4 employees last week. What is the best way to fix this? Can they withhold the amount from an extra check?

Thanks all!

Thanks - that's is pretty much what I have been reading so confirms my thought. Thanks for taking the time to write. I have one follow up question. If the RMD is under $10 ( the plan hadn't processed the next set of cash force outs) - and an RMD was never sent out b/c the participant never responded. Is there a de minimus rule for RMD's?

Can a TPA require the participant sign a distribution form to process an RMD or is the plan sponsor required to pay them out automatically even without a response from the participant.

The prevailing wage contribution is the only contribution in the plan. No profit sharing, qnec or shne. SPD states "An in-service distribution is one that you receive while you are employed by the employer sponsoring this plan. The primary purpose of the plan is to provide benefits to you upon your retirement; however, you may receive an in-service distribution of all or part of your employer account on account of hardship. "

We have a prevailing wage plan and the document states that hardships can be taken but I have read that hardships are not allowed from Prevailing wage funds. Any thoughts?

I have a plan with automatic enrollment notice - it only effects the newly 1/1/17 eligible employees. No changes are made to current employees with an election on file. Does the plan still have to send the notice to everyone? Or just those newly eligible?

I have a 12/31 plan that needs to refund a few hundred dollars to a participant for 401k deferral b/c it was erroneously with held on severance pay in 2015. What is the best way to correct this now in 2016? Just a check to the participant and what is the tax code? Is there any other way? TIA.

Thank you so much for all the detail. It is much appreciated. Sorry for the late reply - I am just getting back to looking at this. Are you familiar with the repair provision too? I have a participant that had damage during a winter storm and had to repair their roof. The invoice is for 2016, even though the damage is in 2015 is that ok to claim? Thanks!

I have a participant requesting a hardship. I just have a few questions. The plan in questions allows 1 loan at a time and allows for hardship distributions from Elective Deferrals for the 6 typical circumstances . The participant has a loan and is now requesting a hardship. Typically we have all ours plans send in documentation for the hardship(over due mortgage bill, tuition bill, etc). 1. If the participant has a loan and is going to stop contributions for 6 months is documentations needed? I saw this language that states if its deemed necessary to satisfy an immediate and heavy financial need that 401k plans use this rule so they do not need to obtain proof of financial need. But looking at the IRS website - I see that it states the plan sponsor is required to keep documentation of the hardship reason. 2. A participant is sending bills for medical services from 2014 and 2015 - can those invoices still be used or should the plan obtain updated invoices? Thanks In advance for any comments. The documents discusses hardships but is silent on documentation of proof.

Ok- so because he had earned income and was an owner until 12/31/2014 - he is still a key as of 12/31/14 so his balance is included in the top heavy test in determining 2015. Right? In one of the examples I see that it states he is key for 4 years? So is he counted for the next 4 years? He has income still just not an owner.