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Showing results for tags 'corrective contribution'.
Found 3 results
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It was determined (after year-end) that a large traditional 401(k) plan had a partial plan termination in 2018. The plan operates on the calendar year. Additional match contributions (plus earnings) were calculated and deposited to the plan in late 2019 as a correction for the 2018 partial termination. The plan administrator had originally calculated refunds to HCEs for failed ADP/ACP. Now the PA is saying that the plan had to be re-tested for the 2018 plan year after the correction for the partial plan termination, and additional refunds are due to the HCEs. Should the compliance testing for 2018 be re-run as a result of the corrective actions taken for the partial plan termination? Thanks! -
Interesting scenario, appreciate any insight: Facts: 401(a) profit-sharing plan (ER contribution only) has 6/30 fiscal year end. Plan terminated 6/30/2017. Participant balances were rolled or distributed by prior record-keeper by 12/29/2017 March 2018, it was determined that the contribution for plan years ended 6/30/15, 16, 17 may have been understated due to an error in the definition of compensation used. Questions: Generally - how does this get unscrambled? The prior accounts have been closed, the prior plan has been terminated, however, prior participants may be eligible for additional contribution. Does the corrective contribution need to go through old plan record-keeper? Can they participants receive the contribution via check? If check - would this be considered cash distribution Any looming deadlines for the contribution to be made? Any and all thoughts welcomed.
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A fiscal plan (5/31PYE) with Safe Harbor Match, pre-tax 401k The employer rehired a former participant on 9/1/2015. This participant was not paid his VAB in the period between former termination date and rehire, and has numerous past service years to his credit. Based on plan terms, this participant was eligible immediately upon rehire. In the past, this participant did contribute 401k deferrals. Upon his rehire, the employer failed to provide the SH Notice and 401(k) Deferral Election Form. The Plan determines the SHM on an annual basis, therefore, the Participant could "increase" his 401k amount for the remainder of the Plan Year so as to capture the full SHM. Upon discussion of this matter, the Participant has told the employer he does wish to make 401k deferral contributions to the Plan. What is the correction necessary for the period 9./1/2015 to date? Thank you.
