Top Ten EB Plan Errors #2
The countdown of the top ten employee benefit plan errors has reached number 2. This problem is one we at BT & Co. have seen quite frequently, the failure to use correct plan compensation.
Retirement plan documents contain specific definitions of compensation for plan purposes. Errors often occur with the following:
For compensation that is improperly excluded, for salary deferral contributions, the employer must fund the make-up contributions plus earnings for lost deferral opportunities to all affected participants, except for those that have reached the maximum salary deferral amount. For the employer contributions, the employer must fund make-up contributions plus associated earnings to all affected participants.
For compensation that is improperly included, for salary deferral contributions, the plan must distribute the deferrals plus any earnings made on the ineligible compensation. For employer contributions, the plan must distribute vested contributions and forfeit non-vested contributions made on ineligible compensation.
Our friends at the IRS have provided us some additional guidance and help if you have had any issues with the compensation related to your Plan.
So there we have number 2 on our countdown and we are nearing the end. If you have any questions about the information above or anything else related to your employee benefit plan audit, send us an email at email@example.com or give Stacey Hammond or Dusty Wagoner a call at (785) 234-3427.
Dusty Wagoner | 04/04/2013