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safe harbor ineligible participant


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Guest LTurner
Posted

I have a plan where an ineligible employee apparently got the enrollment forms and sent them directly to the investment company and a copy to the payroll department. They started deferrals (and unfortunately the company gave them the safe harbor match)... even though they were not yet eligible.

the participant is now eligible as of 1-1-03.

What is the correct course of action?

:confused:

Posted

I would guess some form of correction under EPCRS where an ineligible participant is otherwise included would be the technically correct way to handle it, but some of the other persons on the board may have other alternatives???

Posted

see Q and A #129 under 'correcting plan defects Q and A.' granted this one goes back a few years, but it is still applicable.

Q and A 146 and 150 also discuss the issue

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