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Participant damages for overdistribution from retirement plan


Guest carolyny
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Guest carolyny

:confused: In 1999 an individual trustee distributed $5,000 excess from a a 401(k) with profit sharing plan and money purchase plan. (Probably was 3-5 separate checks because of the way funds were invested.) The participant didn't realize the amount was in excess of his entitled amount.

When the trustee notified the participant of the error in 2001, the participant agreed that based on prior cases he should return the full amount of the overdistribution to the plan.

What recourse does the participant have against the trustee and plan sponsor because the participant invested the money in good faith and the $5,000 decreased to $1,000. Now the trustee is insisting the participant repay the full $5,000, so the participant has to take $4,000 of his own money to repay the plan.

Any case law or other information to help the participant would be appreciated. My email is lol98@prodigy.net

Thank you for reading this post.

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I would answer "the participant has no recourse against the Plan." Sounds like there is more to the story, but the participant's poor investment results w/ the overdistribution is irrelevant. -- I guess if the participant had parlayed the $5,000 into $1 mm, the participant would feel compelled to return the $1mm to the plan ??

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