---
title: "401(k) Plan Error Correction"
date: 2016-07-20
author: "Site Admin"
featured_image: "https://pinnacle-plan.com/wp-content/uploads/2016/07/Girl-Fell-Off-Bicycle.avif"
categories:
  - name: "Uncategorized"
    url: "/category/uncategorized.md"
---

# 401(k) Plan Error Correction

### [![401k Plan Error Correction](http://pinnacle-plan.com/wp-content/uploads/2016/07/Girl-Fell-Off-Bicycle-300x210.jpg)](http://pinnacle-plan.com/wp-content/uploads/2016/07/Girl-Fell-Off-Bicycle.jpg)Let’s get the plan back on track

Some 401(k) plans, especially sizable ones, can benefit from the efficiencies of a bundled provider. However, what’s lacking in such arrangements is personalized attention to the plan. Without the watchful eye of a third-party administrator overseeing plan operations and design, **errors often occur**.

Pinnacle Plan Design collaborates with employee benefit plan auditors and plan sponsors to **correct these errors** and **preserve the qualified status** of the plan.

##### Top 3 Errors Found During a 401(k) Audit

1. Incomplete or inaccurate census data
2. Timing delays between eligibility and first 401(k) deferral
3. Improper computation of matching contributions

##### Pinnacle Plan Design Can Help

As a third-party administrator of 401(k) plans, we are able to identify the course of action required to correct plan errors like these and others. Regardless the severity of the error(s), **we can assist**, whether it’s a simple self-correction issue or a more involved series of errors that require ERISA counsel. Pinnacle acts as the employer’s advocate, doing the leg-work on the correction process and only seeking counsel when necessary, thus keeping costs down.

Here’s the 401(k) error correction process:

1. Identify error
2. Identify corrective measures
3. Complete VCP submission or self-correct, if permitted
4. Get plan back on track

##### Client Success Story – Company X

Company X’s 401(k) audit revealed an issue with regard to compensation. The company **had not withheld the correct amount of pay** as elected by the participants because the company did not use the plan’s prescribed definition of compensation. As a result, the company was facing **costly corrective contributions.**

Pinnacle Plan Design was hired to investigate and correct the error. We compiled evidence, analyzed the numbers and determined that if we could get the IRS to approve a retro-active plan amendment adjusting the definition of compensation, the company could **avoid all corrective contributions**. We collaborated with ERISA counsel to confirm our work and strengthen our position.

In the end, the IRS approved our request and the plan sponsor **saved thousands** in corrective contributions.

## Contact Us

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