RLD513 Posted August 26, 2016 Posted August 26, 2016 A client allowed a participant to begin deferrals a quarter too early (1/1/15). During that time, he deferred $220. We've just now been able to have the client confirm his hire date. February of this year, he took a loan for pretty much half his vested balance, which still included the ineligible contributions. He's continued to make deferrals, so at some point he would have accumulated enough to secure the loan. We're working to get the ineligible contributions out of his account, but I'm not sure what correction would apply for the loan. Would the client have to go through VCP? The IRS page on self-correction seems to indicate some loan failures can be corrected that way. Thanks for any insight.
BG5150 Posted August 26, 2016 Posted August 26, 2016 Why not just do a retroactive plan amendment and make him eligible? Is this person an HCE or reasonably expected to be an HCE in the near term? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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