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Ineligible employee allowed to participate
Guest posted a topic in Defined Benefit Plans, Including Cash Balance
A nonresident aliens who was excluded under the terms of a defined benefit plan was inadvertently allowed to participate. Date of hire as a nonresident alien = 10/1/03. Allowed to participate on 1/1/05. Date nonresident employee became a resident = 6/9/11. Questions: 1, Should eligibility service credited from original date of hire (10/1/03) or from date the employee became a resident (6/9/11)? 2. Is this required to be corrected under an IRS program (only self-correction method I saw was for 401(k) plans using a retroactive amendment. We don't want to bring this participant in early) 3. Other than recalculate the employee's benefit using the correct entry date, what other issues are in involved (i.e. possible over deduction in prior years, funding balances, etc.). What have other out there done? Gratzi!