Administrative simplicity or empathy for participants in need? Allowing more than one participant loan in a retirement plan is not a black and white determination.
As mentioned in my previous blog, EPCRS: How to Correct Improper Exclusions of Employees from a 401(k) Plan, the IRS implemented and recently revised the Employer Plan Compliance Resolution System (EPCRS),
The Paradox of Participant Loans in Default: A Taxable Distribution of a Loan Balance Still Considered to Remain Outstanding
Keeping two sets of books often means that someone is hiding something from the taxing authorities.
Pre-tax contributions to a 401(k) or 403(b) plan are not taxed when made to the plan but are taxed when the participant receives a distribution of the contributions.
When it comes to IRS audits, “an ounce of prevention is worth a pound of cure,” as Benjamin Franklin so wisely put it.
As auditors, we are required to review the controls in place at a plan sponsor of a retirement plan and its service providers to assess the risk of material misstatement resulting from control risk. In doing so, we constantly evaluate the adequacy of the control structure and recommend improvements to strengthen the processes to prevent errors.
Leveling Out ADP and ACP Tests with Refunds, QNECs/QMACs, Bottom-Up QNECs, or One-to-One Contributions
Discrimination. It’s a concept that most people don’t associate with retirement plan savings.
We often ask the question, “How does our 401(k) plan stack up?”
Plan administrators probably view the management representation letter as a document they must sign so they likely do so without reading it closely.
Along with the presidential election on Tuesday, November 8, another election that participants should have on their mind is the deferral for their retirement plan.