"Plan sponsor switched recordkeepers mid-year. During first part of the year, participant took $100,000 COVID distribution from recordkeeper before transfer to new recordkeeper. Participant went directly to new recordkeeper and requested $30,000 COVID distribution. New R/K processed distribution without approval from plan sponsor or TPA. Recordkeeper relied on participant's self-certification. Am I correct that in order for the plan to remain in compliance, the $30,000 adjusted for earnings needs to be returned to the plan by the participant as an 'overpayment'? (Participant not otherwise eligible for an in-service distribution. Not terminated. Not 59½.) Participant does not have the money to put back into the plan. Who's responsible for returning the money?"

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"Say you have a sole prop with one employee. Sole prop's Schedule C is low enough so that taking into account the contribution for the employee, and the earned income reduction, the sole prop's net 'plan' income is, say, $25,500. Sole prop is catch-up eligible, and deferred $26,000. Now, under IRC 414(v)(2)(A)(ii) the sole prop deferral can't exceed $25,500. So I assume the excess $500 is considered a 415 violation? I don't see what else it could be -- not a 402(g) violation nor an ADP failure."

"The alternate payee's attorney is questioning the valuation and wants a full accounting. It's a pooled profit sharing plan. The client is asking whether anything in the Internal Revenue Code or ERISA would prevent the disclosure of this information as it relates to other plan participants. I believe there is, but I can't find it. Any suggestions on how to handle this situation?"

"The company is paid bi-weekly and had 27 pay periods in 2020 instead of the normal 26. One of their payroll people miscalculated their own 401(k) contribution, intending to contribute the maximum $19,500 over 26 pay checks, but instead overcontributed by $750 because of the extra paycheck. But instead of having the excess paid to them out of the plan, the payroll person took it upon themselves to adjust their own W-2 and adjust their own paycheck so that they could get the money back from the employer instead of taking it out of the plan. No 1099 issued, no earnings on the excess. It's a large company, so no one is likely to notice, this would seem to be a problem. How big a problem is this, if it is?"

"Curious as to what approach you take. A sole prop has Schedule C from two different businesses. One has income of $100,000, one has a loss of $50,000. Defined contribution plan. Do you (A) calculate based on $100,000?, (B) Calculate on $50,000?, or (C), Give your opinion (mine is that you don't net the two, so $100,000) to the CPA/Client and let them choose?"

"It's my understanding that, at one time, forfeitures were not allowed to be used to fund safe harbor contributions. I can't find when or whether that changed. Is it OK to use forfeitures now to reduce the safe harbor contribution for employees?"

"Two plans are in a controlled group. Plan A is a 6/30 year-end, and Plan B is a 12/31 year-end. How do I determine who is an HCE?"