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Check out the latest article by Stephen Abramson in the NCCPAP Nassau/Suffolk Chapter Newsletter for August 2024. See page 8 for Steve's article.
If you find yourself with a bit of extra time on your hands in the upcoming months, you may want to use this time to check in with your family’s finances.
Generally, correcting this type of oversight concentrates on making the employee whole, i.e. make up for the missed deferral opportunity in a 401(k) plan and/or the missed employer contribution in a profit sharing plan in addition to earnings on the missed deferral or contribution. In a 401(k) plan the correction is accomplished by an employer “Qualified Nonelective Contribution” (QNEC) equal to 50% of the employee’s group Actual Deferral Percentage (ADP). The group refers to either a Highly Compensated Employee (HCE) or a Non-Highly Compensated Employee (NHCE).
A fiduciary is someone who is authorized by an agreement like a trust or service agreement to act on behalf of someone, whether an individual or an entity like a retirement plan. ERISA defines three types of fiduciaries in Section 3: a Section 3(21), 3(38) and 3(16). Let’s begin with the most basic of the three, the 3(16) fiduciary.