Incoming Rollover

[Gruegen]

The plan only allows those employees that have satisfied the age and service requirements (21 and one year) to make rollover contributions into the Plan. However, there were two employees that made rollover contributions into the Plan shortly prior to meeting the one year service requirement - - the rollovers were made a couple months prior to meeting their entry date. Both employees have now met the service requirement and are currently participating in the Plan.

Although a strict interpretation might lead one to distribute the improper rollover contribution, it would seem counter-intuitive to distribute it now since both employees are now eligble to make rollover contributions. Any suggestions?

[maverick]

I just had the same problem. We amended the plan to allow rollovers from all employees (not just eligible participants).

[Lame Duck]

Does the plan specifically limit rollovers to participants or to those who meet the age and service requirements? What are the plan entry dates? From your post, I couldn't tell if the rollovers were made prior to meeting the eligibility requirements or prior to an entry date, or both. If the rollovers occurred after the eligibility requirements were met but before the entry date, there might not be any conflict, depending on the exact terms of the plan.

Assuming (always a mistake) that the employees were not eligible to make rollovers, Maverick's solution is a good one. It might be possible to make an administrative decision to allow the rollovers that resulted from administrative error without amending the plan, but I really don't like operating a plan outside it's specific terms.