say a plan makes a mistake in a participant's pension. Is there a statute of limitations to protect the plan sponsor? I have thought that it might be 6 years, since my understanding is that a plan need keep participant records for 6 years. Anyone have any comments or knowledge in this area?

There was a discussion thread on this topic a few weeks ago, although I don't remember which board, and I don't think it had to do with a statute of limitations.

My perspective is that you cannot be faulted for trying to correct a mistake. But before you do so, a substantial amount of fact gathering is in order. For example, was this limited to one individual or might it be a systematic error that caused benefit payments to be incorrect for others as well. If the latter, you will want to identify as many as possible, and even identify the magnitude (and direction) of the error.
Many more related issues. I suggest a search on the message boards to see if some bright soul has listed other items for you.
Sorry, I don't have an answer on the statute of limitations issue, except to assume that it is probably a state issue, and may vary be state.

Qualified plans are subject to ERISA which is federal law, so state law issues do not apply to the plan (although I think they do apply to the trust). A basic provision of ERISA/IRC is that in order to be qualified, a plan must operate in accordance with its terms.

Thus, if a participant's benefit is X under the terms of the plan, he must be paid X in order to remain qualified. I think the plan has an obligation to do its best to correctly calculate benefits and if it is later discovered (or brought to its attention) that an error was made, to correct that error.

(Depending on the number or pattern of errors, it may be appropriate to correct under one of the EPCRS programs, but that should probably be discussed in another message.)

On a practical basis, you have to have sufficient data to be able to recompute and correct. If a participant comes to you 20 years later and says my benefit should have been $50/month and I'm only getting $45/month, you may not have the data to recompute and determine the correct benefit, so you'll have to make some decision re what to do.


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