How do we correct profit sharing contributions that were calculated and deposited incorrectly?

[Guest tigbenefits]

New client just informed us that the prior TPA incorrectly calculated and deposited contributions to participant accounts for 2004 profit sharing. Some received too much and others recieved to little. Since the plan is is conversion to us now, we have been elected to help fix it. Can we jsut give and take as appropriate? What do we do with the difference? Any sites on how to correct this would be appreciated.

[QDROphile]

Rev. Proc 2003-44 is an important cite. The the site at which you can find the material cited can be reached throught Benefitslink or at the IRS website, among others.

I composed and deleted several messages about asking anonymous strangers to help you with a matter in which you are evidently completely inexperienced in order to allow you to provide advice and services to your client when your client presumes that you have the knowledge and experience to get the job done and is paying accordingly I gave up because any comments are pointless. The sad fact is that even if you don't get it right, either this time or the next time you are out of your element, your client will be none the wiser and no one will get caught.

[david rigby]

Start here: http://benefitslink.com/IRS/revproc2003-44.html

[Guest tigbenefits]

Thanks, Pax.

QDRO - Wow, you'd think those new to the business would get support from a board like this. Some people like to present solutions rather than problems to the supervisor.

[QDROphile]

I am concerned with people not understanding limits of what they know and the implications of dabbling in what they do not know. I fear that giving someone an "answer" on this board is sometimes giving them the rope to hang themselves or someone else.

A significant part of my work involves correcting the effects of mistaken action or advice of TPAs who do not have the breadth or depth of knowledge to either adequately understand or address the issues. They try to do too much in response to pressure from their clients to go beyond what they are competent to do.

You did not pose your question as a newbie who was struggling with inadequate training or supervision, so you did not get an answer that was appropriate for your situation. Therein lies the problem. It is very difficult to ask a general question on this board and get an answer that is the proper fit for the question because all of the aspects of the question were not expressed. The person who asks the question might not understand the bad fit.

So in your case, you and the client evidently have protection because of review by a supervisor who is experienced and knolwedgable. Good. I wish you well in your career development.

[Appleby]

tigbenefits,

I hope this does not dissuade you from posting more questions.

You know what they say about dumb questions…

By the way, if you are new to the business, plan to stay in it and want to do well, you may want to consider the courses offered by ASPPA and NIPA. Most of these courses will help you to understand from the fundamental to the fairly complex aspects of retirement plans. But even then, you may still find yourself asking what may seem a like a simple question to others. Sometimes the brain is so packed with the complex stuff that one can’t seem to remember the seemingly simple.

QDROphile reminds me of when I first started in the retirement plans arena. I was a grunt then and know absolutely nothing. The senior (and supposedly expert) person who was supposed to provide support was always critical when the new hires asked questions- to the point where I would have a mini nervous breakdown every time I had to ask her a question. But that forced me to become independent in that arena. Suffice it to say, everyone in the firm, including this senior person, now comes to me for the answers. I have her to thank for that. If she had been too supportive, I may have become too depended on her and quite possibly would not have challenged myself to learn as much.

Good luck.