Can a Recordkeeper fund a QNEC ?

[MARYMM]

I asked the question here :

http://benefitslink.com/boards/index.php?showtopic=49527

Recordkeeper's failure to notify us that certain new hires were to be automatically enrolled.

We are in agreement on the correction method, but they are saying that they will fund it in the participants accounts. That doesn't seem right to me. Shouldn't the employer be the one to fund it and be reimbursed by the recordkeeper ?

Thanks !

[ETA Consulting LLC]

You are correct. The last thing you would want is someone other than the employer (or employees) making contributions to a plan. The contributions, as made, would be tax deductible to the employer. The Recordkeeper and typically reimbures or issue a fee reduction, but that will be a transaction between the recordkeeper and the employer, not the recordkeeper and the plan.

Good Luck!

[K2retire]

I agree that is how it SHOULD happen, but don't be surprised if that's not how the recordkeeper wants to do it.