Adjust ADP Refunds for "Gap Period"

[austin3515]

Just because I am sure it will come up, there is no way to reduce refunds for losses in 2020, correct?  Our notices tell participants that there refunds are being increased for gains and I wouldn't blame them for asking if that should not reduce their refunds.  I just want to make sure I am correct when I say it is impossible.

[Belgarath]

I'm a little confused by wording of the question. Since GAP earnings aren't included in the distribution, the earnings being included would be earnings during 2019, right? 

So only earnings (or losses) during 2019 would be recognized. Gains or losses during 2020 wouldn't be recognized. But I may be misunderstanding the question

[austin3515]

I think you understood it.  My motivation I did not state explicitly. Let say someone has gains of 10% in 2019, but then a loss of 5% in 2020.  If I'm the participant I'd be like "hey, I'm refunded all of these gains for 2019, but some of those gains don't exist today, so why aren't you updating the gains through the date of the distrbuition?"

If my answer is "based on the law it is impossible to adjust for gap period earnings" then that makes it real easy for me.

[K2]

I'll bet the document addresses Gap earnings.  Mine does.  It explicitly states no earnings after year end.  

[BG5150]

This is truly an awful month to start taking out funds that had gain on them last year...

[austin3515]

This is truly an awful month all around.

[John Feldt ERPA CPC QPA]

And what about a first year plan where the account now has less in it than the amount of refund that is due?

Or a participant that deferred for the first time starting last year so their deferral account has less in it now than the 12-31-2019 refund that would be due?

[Mike Preston]

Refund is never more than account balance.