Guest Scott Hakes Posted October 16, 2003 Share Posted October 16, 2003 I have a Profit Sharing Plan that was terminated and all benefits distributed several years ago. Recently, we received a small (~$5,000) settlement from a class action lawsuit relating to one of the funds that the plan held prior to termination. I'm unsure what I should do with these funds. I did a quick look around, but didn't find any guidance on the issue. Has anyone else dealt with this type of situation? Thanks. Link to comment Share on other sites More sharing options...
mbozek Posted October 18, 2003 Share Posted October 18, 2003 Legally the award should be divided among those participants who invested in the fund and paid to them as a distribution. However, there is a question of whether the plan admin has any records of those participants. If the participants cannot be located then you could treat it as a forfeiture and check the plan rules for disbursement after termination of the plan. There really isnt any guidance on what to do with latent plan assets which surface after a plan has been terminated. I once had a client who received a check for $80,000 from an insurance co. that had demutualized for a group annuity contract used to fund a DB plan that terminated pre ERISA. The client elected to deposit the funds in another plan. mjb Link to comment Share on other sites More sharing options...
Guest oxdougw Posted October 21, 2003 Share Posted October 21, 2003 We had the same thing happen with the demutualization of Principal Financial. We received stock in an old plan that used to reside there. We had to go back to the old records and allocate those "windfall" gains to everyone based on their final plan balance. Four had died and we found 3 bene's. The 4th will forfeit. We're also not paying out any checks less than $10 as deminimus. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now