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Posted

DC plan paid someone out at 100% vested when they should have been only 20%.  About an $8,000 difference.

So start in EPCRS, Appendix B, Section 2, part .05 Correction of Other Overpayment Failures

An Overpayment from a defined contribution plan is corrected in accordance with the rules in section 2.04(2)(a)(iii).

section 2.04(2)(a)(iii)

(iii) Return of Overpayment Correction Method. A failure to satisfy § 415(c) that includes a distribution of the § 415(c) excess attributable to nonelective contributions and matching contributions may be corrected using the return of Overpayment correction method set forth in section 6.06(3) of this revenue procedure.

But, 6.06(3) is Correction of Overpayment (defined benefit plans).

Shouldn't I be using 6.06(4), Correction of Overpayment (defined contribution plans and 403(b) Plans.)? 

 

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

Posted

You request repayment. If not repaid, you inform that excess was not eligible for R/O and you issue corrected 1099R if needed. If not repaid, sponsor (or a third party, if responsible) makes plan whole for the amount that should have been forfeited rather than paid.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

Posted
38 minutes ago, CuseFan said:

You request repayment. If not repaid, you inform that excess was not eligible for R/O and you issue corrected 1099R if needed. If not repaid, sponsor (or a third party, if responsible) makes plan whole for the amount that should have been forfeited rather than paid.

I'm good on the correction, I think.  Just wanted to make sure I didn't miss anything with my meanderings through EPCRS, and if there was really anything in 6.06(3) that I needed instead of 6.06(4).

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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