cpc0506 Posted July 21, 2015 Posted July 21, 2015 We are the new TPA for a 401(k) safe harbor plan for 2014. During 2014 (prior to our taking the plan over) a participant took an in-service from her account from all sources. Plan allows for in-service at age 59.5 (she is 69 and still employed) but from only the pre-tax and rollover sources. Can I do a corrective changing the sources of in-service for 2014? I know this is a safe harbor plan..... Let's ignore that for now, under EPCRS we can do a corrective amendment for loans and hardships. Do you conclude you can do the same for in-service?
Mike Preston Posted July 23, 2015 Posted July 23, 2015 As long as you are asking the IRS for a compliance statement, I see no reason why the IRS shouldn't allow it.
Mike Preston Posted July 24, 2015 Posted July 24, 2015 Self correction via plan amendment is only available in very limited, enumerated circumstances. I don't think yours is listed. Do you?
MWeddell Posted July 28, 2015 Posted July 28, 2015 I agree with Mike Preston. See pp. 17. 114 of http://www.irs.gov/pub/irs-drop/rp-13-12.pdf and you'll find that self-correction via plan amendment is not available. Instead, look at page 40, which lets one correct an in-service distribution by not making the participant's account whole.
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