MPP Question

[MBCarey]

Sorry if this is the wrong forum, but can someone tell me what is required if a money purchase plan is overfunded? Can the money stay in the contract to be allocated for next years contribution.

[WDIK]

By overfunded, do you mean contributions in excess of the plan formula or in excess of the deduction limit?

Are you talking about contributions made during the plan year or after the end of the year?

What was the cause for the error?

What related language is in the plan document?

(Topic moved to a more general forum)

[MBCarey]

Contributions were in excess of plan limit. Some were made during the plan year and in the first quarter of the following year.

I have not found anything specific in the Plan Document as of yet.

There is also additional excess caused by a terminated employee who was not vested.

Marybeth

[WDIK]

Some were made...in the first quarter of the following year.

Apply all or a part of these contributions to the plan year in which they were made (rather than the prior year) to see if that eliminates your "overfunding" problem.

[Medusa]

In any event, a distinction needs to be made between excess contributions (assuming that there are some) and forfeitures, such as that generated by the terminated participant. The plan document will address how the latter funds are to be handled - either applied to reduce required contributions, or reallocated amongst remaining participants.