Guest dstran Posted December 3, 2007 Posted December 3, 2007 Hi - have a 401k plan whereby the 70 1/2 minimum amount for a father of an owner was calculated incorrectly for the last 15 years (TPA didn't include insurance cash value in account balance). if they do not go back and correct for each of the 15 years, can the plan be disqualified or is this an issue that affects only the individual participant? thanks.
masteff Posted December 3, 2007 Posted December 3, 2007 70 1/2 distributions are required by Code section 401(a)(9). So it's a plan qualification issue, not just individual tax issue. They'll be looking at filing under EPCRS. Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
Lori H Posted December 4, 2007 Posted December 4, 2007 i believe he will be subject to a 50% excise tax penalty on the amount that was not distributed as well.
BG5150 Posted December 5, 2007 Posted December 5, 2007 Was the guy in any other plans, or did he have an IRA? I think you can consolidate accounts from a balance perspective and withdraw the aggregate amount from just one account, if I'm not mistaken. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
david rigby Posted December 5, 2007 Posted December 5, 2007 I think you can consolidate accounts from a balance perspective and withdraw the aggregate amount from just one account, if I'm not mistaken. Unfortunately, you are mistaken. IRA's, yes. Qualified plans, no. 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.
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