jsb Posted July 31, 2014 Report Share Posted July 31, 2014 Could use some advice regarding disposition of excess plan assets. I have encountered remaining funds from 2 plans that are now terminated. We're embarking on a wellness effort and this money could provide several years of start-up funding. But I'm not sure it's an appropriate use of the funds. After some research I discovered the following: Life Insurance Plan - Fully insured life insurance Plan was terminated in the mid-90s and the employer subsequently received a payout from the demutualization of the former insurance carrier. Funds have just been sitting since 2000. The plan was funded by both employer contributions (basic life benefit) and employee contributions (optional purchchase). Disabiltiy Plan - Self-funded disability plan was terminated in 2013. All claims are paid. All premiums were 100% paid by employee contributions from a limited, definable subset of the employer (about 20% of the workforce). Excess assets accummulated over a 20+ year period. While "finding" these funds is a good thing (?), their disposition may pose some issues. Although the plans are not subject to ERISA (governmental), its provides a reasonable guidepost. Researching a similar issue years ago, I recall an ERISA provision (but can't find the cite now) permitting an employer to recoup its own premiums first, and then providing that anything above that (if any) could be used for the benefit of employees generally, or distributed to current or former participants. That might solve the Life Plan excess issue. But the Disabiltiy Plan excess (all from employee contributions) is another matter. What are acceptable uses of this money? I'd appreciate any leads, cites or suggestions you might offer regarding acceptable use of these funds. Many thanks in advance. Link to comment Share on other sites More sharing options...
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