OOPS Roth conversion

Participant has existing accounts in 401k plan and wants to convert part of the pre-tax accounts to in-house Roth, accepting tax consequences.

They get sloppy and check the box to convert all of their account. Trustee has completed the transfer in the past few weeks.

Participant realizes their error and wants to reverse the transaction.  Trustee wants an opinion on what is allowed and what is taxable.

Simple answer would be that it was already done, no looking back. But can the Trustee allow the correction and restore part of plan accounts back?

Just now, SoCalActuary said:

Participant has existing accounts in 401k plan and wants to convert part of the pre-tax accounts to in-house Roth, accepting tax consequences.

They get sloppy and check the box to convert all of their account. Trustee has completed the transfer in the past few weeks.

Participant realizes their error and wants to reverse the transaction.  Trustee wants an opinion on what is allowed and what is taxable.

Simple answer would be that it was already done, no looking back. But can the Trustee allow the correction and restore part of plan accounts back?

Did the participant fill out paperwork that was explicitly correct for converting only part of his account, but the trustee, n executing the transaction screwed up, then there has to be a correction made and the trustee is going to have to work with the fund custodian to get it corrected.  Who did what?

Participant made the mistake, and trustee executed the instructions from the participant as written.

I am wondering if the trustee has the authority to reverse the transaction, also considering whether the trustee even wants to.

On 9/27/2019 at 3:05 PM, SoCalActuary said:

Participant made the mistake, and trustee executed the instructions from the participant as written.

I am wondering if the trustee has the authority to reverse the transaction, also considering whether the trustee even wants to.

Trustee did what the participant directed. Whether participant checked the wrong box or not, that's the box he checked.  He doesn't get a Mulligan in this game.  Trustee clearly does NOT have the ability to reverse it.

Similar situation:

Participant requests forms to convert after tax funds to Roth

Forms sent to participant did not include check boxes to indicate source of funds

Between time forms were sent and time they were submitted(approx. 1 week), Trustee creates new forms that contain check boxes that clearly indicate source of funds but does not provide to participant.

Trustee converts entire account to Roth.

Can this be corrected?

2 hours ago, Methuselah57 said:

Similar situation:

Participant requests forms to convert after tax funds to Roth

Forms sent to participant did not include check boxes to indicate source of funds

Between time forms were sent and time they were submitted(approx. 1 week), Trustee creates new forms that contain check boxes that clearly indicate source of funds but does not provide to participant.

Trustee converts entire account to Roth.

Can this be corrected?

Assuming this is all within the plan and currently was done, I see no reason why the trustees should not correct it. If the participant clearly asked for after tax funds to be converted, that should be enough to allow new forms to be signed that includes that designation and the designation of the funds characteristics made as they were requested.