Earnings Calculation

[Guest GreenERISA]

I am trying to decipher the methodology for calculating earnings for an SCP. The issue is that the ER failed to follow terms of the plan as it relates to deferrals on bonus payments.

My predecessor asked for rates on:

the Plan's default fund (which happens to be a TDF so there are multiple rates)

Money Market Fund

the experience of the plan as a whole

experience of the highest HCE for the plan year

I am curious as to where he came up with these? I don't see them in the RevProc. Also, if these are the rates I should be looking at, do I have to go with the highest rate of the 4 options above? I thought that App. B, Section 3.01(3)(b) would be applicable and I would only have to look at the rate of return for the fund with the highest earnings rate for the period of the failure since the corrective ctrb is going mostly to non-HCEs?

Thanks!

[Tom Poje]

the guidelines described in Section 3.01(3) are sufficient

but note that the last sentence of 3.01 says "Other earnings adjustmrnt methods, different from those illustratedin this section 3 may also be appropriate for adjusting corrective contributions or allocations to reflect earnings.

[Guest GreenERISA]

the guidelines described in Section 3.01(3) are sufficient

but note that the last sentence of 3.01 says "Other earnings adjustmrnt methods, different from those illustratedin this section 3 may also be appropriate for adjusting corrective contributions or allocations to reflect earnings.

Thank you!

Am I understanding then, that though it does not fall within the safe harbor of adhering strictly to the Rev. Proc. methodolgy, that if we were to calculate using the DOL calculator, we may be OK? The service provider said that many of their clients are using the DOL calculator to correct under SCP

[Tom Poje]

since the calculator is an acceptable means for calculating lost earnings on late deferrals, it would probably fall within the guidelines, if the plan was ever audited.