ERISA guy Posted June 12 Posted June 12 For example, if a missed nonelective contribution for a participant should have been deposited on day 1, and the corrective contribution was deposited on day 100, earnings would of course be calculated from day 1 through day 100. What if the earnings contribution is not deposited until day 150? Must the earnings calculation be adjusted to also account for the additional 50 days it took to deposit the earnings contribution - or is the calculation only of earning from day 1 through 100 sufficient?
R Griffith Posted June 13 Posted June 13 In order to truly correct, earnings on earnings should be done. That is how I have always done corrections. The idea is to make the participant whole, so they should have earnings through the earnings deposit day. KaJay, Bri and EBP 3
Artie M Posted June 16 Posted June 16 Yes, you always have to do earnings on lost earnings, if a correction was made in part but not fully corrected until a later date (full correction meaning the contribution plus all earnings required being contributed) Just to make sure though. you state this was a missed "nonelective" contribution. Are you certain it is late? Most plans do not have a time by which nonelective contributions must be made except maybe for the timing to ensure tax deductibility or to be allocated to qualify as an annual addition. EBP 1 Just my thoughts so DO NOT take my ramblings as advice.
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