Missed Periodic Installment Payment - Now What?

[Guest Jay345]

Hello all,

The participant previously elected to take distributions utilizing an installment payment method. It was discovered that during 2007, one of these installments was not made. What would need to be done to correct this? Do you just make the required payment? Should earnings be caclculated? Do we need to use EPCRS?

I'm familiar with how to correct a missed deferral, but have not run in to this issue before, and I can't seem to find any info on how to correct it.

Any help would be appreciated.

Thanks!

[masteff]

We need a few more details.... Is this a DC plan? Is the installment election revocable or irrevocable? Is this part of a "series of substantially equal payments" prior to age 59 1/2 (for the exception to the 10% penalty)? Aside from the installment payment election, does the participant have the option to take partial payments as needed w/out restriction?

If it's a DC plan, is revocable, is not part of a section 72 "series...", and if the participant can take as needed partial payments, then I'd ignore the missed payment.

If it's a DB plan (which generally means it's irrevocable and can't take as needed payments), then I'll let someone better versed in DB plans address the issue.

[Guest Jay345]

We need a few more details.... Is this a DC plan? Is the installment election revocable or irrevocable? Is this part of a "series of substantially equal payments" prior to age 59 1/2 (for the exception to the 10% penalty)? Aside from the installment payment election, does the participant have the option to take partial payments as needed w/out restriction?

It is irrevocable and part of a series of substantially equal payments.