lost earnings

[pmacduff]

curious what others do when submitting the lost earnings for participants on any of the 401(k) investment vendors such as JHancock, American Funds, Nationwide, etc. with regard to how the

deposit is coded. I don't believe it should be made as a "contribution" as that would impact the current year's tests.

I think it could be coded as a "transfer in" on most vendors; just trying to get my arms around the mechanics of the actual payment to the Plan participants.

thanks in advance.

[EBDI]

I am working on a case right now that has lost earnings and is with American Funds. This is how they advised me to handle it:

"The plan sponsor should submit a roster online and use 'Check' as the payment type (not ACH). This will place the roster in a Held status. Once the roster is in Held, please have the plan sponsor send us an email requesting that the roster be updated to an earnings roster. They should provide the amount of the roster, batch number, and the payroll date. Their email should also include instructions to have Recordkeeper Direct change the payment type from Check to ACH. Once we have coded the roster as earnings, we will submit the ACH draft, and therefore a check does not need to be mailed to us."

[ESOP Guy]

I prefer having them coded as earnings. I agree contributions is a bad answer.

For John Hancock and Nationwide it requires a special process request. I believe there is a fee to have the special process request processed.

[pmacduff]

thanks EBDI. I actually now have one for JHancock and I'm not sure that I can get JHancock to process the correction as earnings.

Therefore I think a 'transfer in' will work in this case. The reports will then reflect the amounts separately for proof of correction as well.