Dazednconfused Posted June 26, 2024 Posted June 26, 2024 Participant makes a Roth 401k election 1/1/24, they just notice that nothing is being withheld from paycheck in June, however, the correct Roth contributions per election have been funded to participant's Roth account (not sure how this happened). So, nothing withheld from paycheck but Roth is funded. The correction, in my thought process, is MDO, since failure to implement correctly. I would use EPCRs to correct the MDO, provide notice and fund a qnec, but question about the Roth that has been funded. My thought was to transfer the $5k that has been funded out of his Roth to the forfeiture account and use later. Is there an issue with that since it is in a Roth source? Is there a better solution in this case? Thanks in advance!
Bri Posted June 27, 2024 Posted June 27, 2024 Wait, isn't the problem just that the guy has too much take-home pay, but the correct plan amounts were deposited? Seems like the plan is actually in good standing but that the guy's next paycheck needs to have six months' of deductions properly taken off the gross. Bill Presson and Luke Bailey 2
CuseFan Posted June 27, 2024 Posted June 27, 2024 Plan is correct, his tax situation is correct, and he essentially owes the employer those funds as Bri noted - like an interest free loan from the employer, which they can arrange how to have it repaid, in my opinion. Luke Bailey and Bill Presson 2 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
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