Receivable Employer Contributions

[msmith]

Any comments on how many Plan Years you would carry a receivable Matching contribution (whether or not discretionary)?

What about a Money Purchase contribution?

Client has been advised to discuss the deduction issue with their CPA and about disqualification.

 

[Lou S.]

Money purchase plan you have a funding deficiency each year it isn't cured I believe and need to carry it "forever" until cured.

As to a receivable match, I would assume if you aren't correcting through EPCRS you would reverse it and file an amended Form 5500 for the year it was included but not made. Discretionary/Fixed might have some implications about qualifications issues.

 

[CuseFan]

Agree, MP you have funding deficiency (reported on the 5500) and don't forget the excise tax liability.

[msmith]

Many thanks to all that replied.

[imchipbrown]

You could possibly have a rolling receivable-  2014 paid in 2015, 2015 paid in 2016 etc.  You would always have "Contributions received or receivable".  Receivables never paid is another issue.

Let the CPA worry about what was deducted.

[msmith]

Thank you, imchipbrown.

[ESOP Guy]

Even if it is a discretionary match or PS contribution my understanding is if there was a board resolution declaring it then there is a contractual obligation to pay it.  

I would check with an attorney to ask what, if any, conditions reporting it say on participant certs as existing for years makes a discretionary contribution obligatory under employment or contract law.

To be very clear here I am not talking about pension law but in both cases contract or employment law.   I can imagine someone raising an issue if a match had been show as part of my account for years and suddenly someone says, "we were just kidding about that". 

Maybe one of the lawyers that comes by this board as an insight but I would definitely look beyond pension law.