Most errors I have seen through plan audits are typical. It\u2019s usually late deferrals or a screw-up on the definition of compensation. Yet there can be some true horror shows out there, I\u2019m talking about catastrophic errors that can lead to disqualification.<\/p>\n
The catastrophic errors that will lead to a plan disqualification often result from the failure (usually intentional) of plan sponsors to not include employees for purposes of covering them under a plan. Could be a 401(k) plan with employer contributions, but usually a defined benefit plan. Sometimes the intent was caused by an actuary, other it can be for the advisor or the accountant. The controlled group rules are very basic, so I would be surprised if the lack of coverage wasn\u2019t intentional. There are a lot of great providers out there, but a lot of jokers, that put plan sponsors and their retirement savings at risk.<\/p>\n
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