Calculating Gains on Excess Deferrals for failed ADP

[MBCarey]

Can anyone tell me if there is an easy suggestions for calculating gains on the amount of excess deferral that is returned to a participant.

[Tom Poje]

easiest suggestion is to get someone on Benefits Link to do it for you

the regs say any reasonable method.

one such method would be

Income allocable through the end of the plan year is calculated as follows:

Corrective distribution * gains to the deferral account

(Beginning balance of deferral account + total deferrals for the year)

note: if you desire to operate the plans under the terms of the new regs, then

you would also have to determine 'gap' income.

[Guest fore01k]

MB-

Be sure to review the plan document (if you haven't already) Our prototype specifically details how to calculate the gain on each kind of return. While, as Tom correctly states, the regs allow any reasonable method, you do not want to go against the document by determining your own method.

[MBCarey]

Tom, Are you volunteering?

Tell me if this makes any sense at all? I determined the percentage of the amount of excess to the total deferrals made for the year by the participant. Then I multiplied the total earnings on the deferral account x that percentage.

Example: 134.16 (excess) / 13,000 (total DF) = .01032% Total gains to deferral account - 10,613.95 x .01031% = 1.10

Thanks for your expertise!!

Marybeth