Guest meggie Posted January 8, 2003 Posted January 8, 2003 Is it possible to retroactively correct a situation where pick up contributions should have been withheld effective with a person's date of hire and the muncipality failed to do so? [Date of hire = 6/2002]. The town would like to correct the error and is looking for assistance. Participation in the pension plan is required as a condition of employment. Thanks.
Everett Moreland Posted January 8, 2003 Posted January 8, 2003 You might conclude after reviewing the plan document and Revenue Procedure 2002-47 that correction is needed to maintain the plan's qualified status..
Guest meggie Posted January 8, 2003 Posted January 8, 2003 Thanks for the reference- but I don't believe failure to withhold pick up contributions under 414(h)(2) is specifically addressed in Rev. Proc. 2002-47.
Everett Moreland Posted January 8, 2003 Posted January 8, 2003 It might not be. My concern is that the employer might have failed to follow the terms of the plan, which according to the IRS is a disqualifying event. If the employer has failed to follow the terms of the plan, that failure should be corrected under RP 2002-47, by self-correction, if self-correction is allowed (which it probably is here), or by submission to the IRS. My point in my first post was to answer your question about whether it is possible to retroactively correct. Correction is possible, and probably also required to maintain plan qualification.
buckyks Posted January 29, 2003 Posted January 29, 2003 You might refer to a thread I posted on 3-8-2002 titled 414(h)(2). It might give you some additional info.
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