Withdrawal of pre funded employer contribution

[k man]

can the employer use mistake of fact to withdrawal an unallocated contribution they made wrongfully thinking the plan would be top heavy?

[Lou S.]

Very doubtful. The mistake of fact rules are fairly narrow if I remeber correctly and do not appear to apply in this case.

I think you are going to be stuck with allocating a descretionary contribution under the terms of the plan.

You might try this thread for some additional suggestions.

http://benefitslink.com/boards/lofiversion...php/t14199.html

[k man]

Very doubtful. The mistake of fact rules are fairly narrow if I remeber correctly and do not appear to apply in this case.

I think you are going to be stuck with allocating a descretionary contribution under the terms of the plan.

You might try this thread for some additional suggestions.

http://benefitslink.com/boards/lofiversion...php/t14199.html

next question - what are the consequences if the employer takes the money back and it was not due to mistake of fact?

[J Simmons]

20% or 50% reversion tax under IRC 4980, and the plan yet being liable to the participants for benefits based on the reversion amount.

[k man]

Very doubtful. The mistake of fact rules are fairly narrow if I remeber correctly and do not appear to apply in this case.

I think you are going to be stuck with allocating a descretionary contribution under the terms of the plan.

You might try this thread for some additional suggestions.

http://benefitslink.com/boards/lofiversion...php/t14199.html

next question - what are the consequences if the employer takes the money back and it was not due to mistake of fact?

What about disqualification and ERISA penalties?