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PS

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Hi, 

There was a balance of $300 in the forfeiture account and the sponsor was unable to terminate the plan because of the balance in the plan level l account.  The sponsor decided to re-allocate the balance in the forfeiture to one participant as a match contribution.  There was no employee for 2022, they funded a match in 2022 but there is no deferrals which has lead to a operational defect  since they can not fund it match. 

Since the plan is completely terminated what options the client has to have this corrected/fixed. 

 Thanks

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14 minutes ago, Bri said:

If there's no pay to substantiate it even as a nonelective contribution, why not use it to pay admin fees?

The sponsor did not have any invoice the only option was to have the funds re-allocated, but they chose to give it to one part. 

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the funds already got re-allocated and the distribution was processed.  We have now identified the defect and trying to see how this cab be fixed or how this can be fixed in order to pass the testing. 

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8 minutes ago, Bri said:

How about the new overpayment-don't-recover option new to Secure 2?

sounds good, but is there anything that I can share/point the client to refer on this ( Secure 2) 

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15 minutes ago, Bri said:

How about the new overpayment-don't-recover option new to Secure 2?

I could be wrong but I'm not sure it's an over payment. Rather it sounds like a 415 excess since there was no pay 415 pay to give it to the participant in question.

 

My though was could it be "allocated" in a prior year when there was 415 comp and the custodian just "forgot" to move it from the unallocated account to the participant account?

At any rate seems like a more than $300 of billable hours whatever solution is done to fix it.

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1 minute ago, Lou S. said:

I could be wrong but I'm not sure it's an over payment. Rather it sounds like a 415 excess since there was no pay 415 pay to give it to the participant in question.

 

My though was could it be "allocated" in a prior year when there was 415 comp and the custodian just "forgot" to move it from the unallocated account to the participant account?

At any rate seems like a more than $300 of billable hours whatever solution is done to fix it.

the plan terminated in 2022 and if they allocate it for 2021 than don't they have to allocate to all eligible participant?  the client allocated the $300 to just one participant in 2022. 

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42 minutes ago, PS said:

the plan terminated in 2022 and if they allocate it for 2021 than don't they have to allocate to all eligible participant?  the client allocated the $300 to just one participant in 2022. 

It depends what the plan document says. Is everyone in their own rate group? Will the testing pass if that participant gets an extra $300?

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