Guest EBW Posted June 18, 2003 Posted June 18, 2003 We have found an error in a benefit certification. Is is our mistake. The participant (non-highly compensated) is receiving too much. What is your experience with correcting something like this?
Blinky the 3-eyed Fish Posted June 18, 2003 Posted June 18, 2003 Inform the participant of the error and actuarially adjust future payments or have the overpayment repaid. I am sure the participant will not be pleased, but you have legal recourse to make the correction. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
david rigby Posted June 18, 2003 Posted June 18, 2003 Every situation is different. The plan should probably have written administrative procedures outlining what actions to take, or not take. The goal is usually to treat all impacted participants alike, although you might have a de minimus exception. Usually it makes sense to seek reimbursement, but the plan sponsor will often face a decision when that does not produce anything. This revenue ruling deals shows how the IRS expects to deal with any repayment, at least from a tax perspective. http://benefitslink.com/IRS/revrul2002-84.shtml I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Guest EBW Posted June 19, 2003 Posted June 19, 2003 What are the possible ramifications for our company - other than client dissatisfaction and participant unhappiness? What have other companies done to smooth the ruffled feathers?
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