bhodge113

I have a 403b plan with no exclusions for eligibility. They had a new employee that was hired for a temporary/part time/one year position and they didn't allow her to defer. The match is 9% if you defer 3%. I think they should put the money in for 2023 for her and year to date for 2024. They wish to amend the document going forward to exclude Temporary and Part Time employees. I do not have any other 403b plans and am not certain that is the best route. It's a small employer with only 9 employees. Thoughts?

Confirmed this can now be self corrected - The answer changed with SECURE 2.0 and Notice 2023-43. Specifically, Section 305(b) of SECURE 2.0 allows participant loan failures to be self-corrected under the rules of EPCRS section 6.07. The Notice, at Q&A 3, confirms that errors such as this can now be self-corrected, whereas before they could only be corrected under VCP.

I have a large plan that is audited for 2022. A participant requested a maximum loan ($13000) from his account on a weekend. The account balance he saw online was $26,406.45. By the time the loan was approved and processed, his account had fallen to $25,851.50. It appears that he is over his maximum loan amount by $74.25. I looked at the IRS Fix-It Guide and found that the participant must repay the excess loan amount and if needed amortize the remaining principle. Is there anything else i need to be doing?

I have to amend a Schedule D attached to a large plan 5500 that was just filed for 2021. The employer neglected to give me a new participating plan. Do I just attached the updated Schedule D to the 5500 for filing or do all the Schedules and original documents get refiled as well? The 5500 Instructions are not clear.

I have a 401k plan with a 3% safe harbor that has two participants that missed having deferrals for the entire 2020 year. Their payroll department "turned them off" in the year prior because they hit the 402g limit and neglected to restart the deferrals in 2020. The issue is that one of the participant's would have had catch up deferrals while the other didn't. Therefore, using the average deferral percentage to calculate the QNEC seems not appropriate for both. I did find a newsletter online that indicated that a missed catch up should be "fixed" with a 50% QNEC. Does anyone have any documentation that addresses this specifically? It is not addressed in the EPCRS Fit it Guide