"Reasonable" estimate of earnings needed

[BG5150]

EPCRS says we need to adjust excess allocations for earnings (someone was over-matched).

Section 6.02(5)(a) says if you cannot make a precise calculation, you can make [a] "reasonable estimate." Then, if a reasonable estimate is not possible, we can use the VFCP calculator.

We are in a situation where a precise calculation would be too onerous and expensive. However, I believe the DOL calculator just compounds the error by imputing gains on the excess allocation where most accounts over the time lost money.

Since there is no published (by the gov't) "reasonable estimate," management says we should go with the DOL calcuator for now.

(There are Earnings Adjustment Methods in Appendix B, but they specifically state the section doesn't apply for corrective reductions of account balances. Further, it says to look to "section 2.02(2)(a)(iii)© for rules that apply to the Earnings adjustments for such reductions." Umm, Section 2.20 is "Modifications to VCP submission procedures" and has no subsections.)

So, I'm looking for anything published as to what might be considered a "reasonable estimate" that would apply to excess allocations.

[bito'money]

BG5150,

You need to look at 2.02(2)(a)(iii)© in APPENDIX B.

Have fun.

[BG5150]

BG5150,

You need to look at 2.02(2)(a)(iii)© in APPENDIX B.

Have fun.

Unfortunately, that only addresses people whose accounts must be reduced when someone else didn't get enough profit sharing.

[bito'money]

The IRS is telling you to use the same rule as for that type of fix.

[BG5150]

Where does it say that?

[bito'money]

Appendix B, section 3.01(d).