Guest EBBEETS Posted August 1, 2011 Posted August 1, 2011 I have a PS plan that had a MPPP merged into several years ago. Plan made a hardship dist to a participant in excess of PS source which means part of the MPPP source was paid out under hardship dist. Participant is only 52 years old. I need help on corrective measure since MPPP attrib source is not eligible for hardship dist at this age...Thanks.
ETA Consulting LLC Posted August 1, 2011 Posted August 1, 2011 The first step would be to attempt to place the funds back in the plan. Just a first step. The contengencies will begin from there. Good Luck! CPC, QPA, QKA, TGPC, ERPA
Guest EBBEETS Posted August 1, 2011 Posted August 1, 2011 The first step would be to attempt to place the funds back in the plan. Just a first step. The contengencies will begin from there.Good Luck! Since this was a hardship dist for medical condition, I am going to assume the participant will not have the money to put back in the plan. If we write the particpant and explain that this distribution should not have taken place and ask for the money back, is this enough to simply make an attempt to correct the error?
ETA Consulting LLC Posted August 1, 2011 Posted August 1, 2011 Well, you have an inservice distribution from a pension plan prior to age 62 (and Normal Retirement Age). Looks like a VCP would be in order; which by that time you would at least explain to the IRS that you've attempted to get the funds back from the recipient. I am not aware of any other alternatives. Good Luck! CPC, QPA, QKA, TGPC, ERPA
J Simmons Posted August 2, 2011 Posted August 2, 2011 I think you should do a VCP submission. Also, if this 52 year old P is an HCE, then you better bend over backwards if necessary to get him or her to put that money back in the plan. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.
Guest EBBEETS Posted August 2, 2011 Posted August 2, 2011 Thanks for the input. This is a non HCE and the amount in queston is about $4,000. Any chance this would be a good candidate for SCP since it is such a small amount, relative to the plan size, and is single participant issue?
ETA Consulting LLC Posted August 2, 2011 Posted August 2, 2011 Thanks for the input. This is a non HCE and the amount in queston is about $4,000. Any chance this would be a good candidate for SCP since it is such a small amount, relative to the plan size, and is single participant issue? SCP would entail them putting the funds back in the plan; which was established that because it was a hardship it would be unlikely the particpant would replenish the funds. This is not even engaging in whether the error is eligible for correction under SCP (but assuming it is, how else would you make the account whole without having them replace the funds). Good Luck! CPC, QPA, QKA, TGPC, ERPA
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