FAQ 472: Excess Aggregate Contributions with Daily Val


How to process excess aggregate contributions on a daily/DV Direct plan.


My recollection is that excess aggregate contributions are forfeited to the extent they are non-vested, and returned to the extent they are vested. With that said:

Returning excess aggregate contributions can be accomplished two different ways:
1. Enter a Contribution Returned (type 22) transaction in the match source for affected HCEs. You can then output to the transition file and trade. However, a record in the disbursement file will not be created, so you'll have to add one and code properly to get MSCS to make the distribution.
2. Or, change the 'Source Type' for source 3 to be '1 - EE Pre-Tax', enter a partial withdrawal via Participant Inquiry and trade as normal. This will then create the disbursement file record you need, but will also result in a withdrawal (type 4) transaction rather than a type 22 - I'd edit after the trading has occurred. Make sure you change the source type back.
Note - Also, it would be best to have a transaction date of 12/31/2007 so when you process transactions for 2008 for testing purposes, even though your purchase date will be current.

Forfeiting excess aggregate contributions: it's probably best to also use a Contribution Returned (type 22) transaction entered directly in the affected HCE transaction record for source 3. Output to transition and trade, and then have MSCS manually move the money from the client's disbursement account to their plan account so it's available to be used as needed.
1. If you want to apply the forfeited amounts to future contributions, it's there and available to be used when ever you want.
2. If you want to move this money to your Forfeiture account and then reallocate, after the type 22 has traded and confirmed, add a Transfer In (type 3) transaction to your default fund in the Forfeiture employee for the dollar amount of the proceeds, output to transition and trade. The money will then be in your default fund for the Forfeiture employee.

To reallocate and reinvest monies in the Forfeiture employee, see Section 8 of your DV Direct User Guide, page 14 & 15.