Trust received check without a participant identified

[waid10]

Hi.  We have received a check for around $500 from an investment fund where we are unable to determine what participant it applies to.  The check is made payable to the plan.  Apparently the SEC ordered a settlement under an administrative proceeding.  Certain investors received settlement proceeds if they were affected by market timing activity in 2001-2003.  We have not been able to figure out what participant account to apply the check to.  

What should we do?

[ESOP Guy]

Sorry if you have already done this but can't the people who sent the check tell you who it relates to? 

I am assuming this is a daily plan not a pooled plan.  If it is a pooled plan that is a pretty different answer.  

[david rigby]

Might apply to multiple participants?

[Peter Gulia]

If you find that the payment refers to the plan but is not allocable to a particular individual, you might ask the responsible plan fiduciary for its instructions about how to allocate the amount in the plan's subaccounts.

While I don't give anyone legal advice, at least one bit of nonrule administrative law suggests some ways a plan's fiduciary might evaluate an allocation.

https://www.dol.gov/sites/default/files/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2006-01.pdf

A service provider also might inform the decision-making fiduciary about the service provider's fee for processing the allocation because that information might affect the fiduciary's reasoning.

[Luke Bailey]

Each set of facts is unique, but it is not unheard of, and not inconsistent with the guidance that Fiduciary Guidance Counsel cites above, for a plan sponsor who has received such a small check, after confirming that it cannot reasonably determine the identity of the participant or participants whose investments in the particular mutual fund or funds 15 years ago gave rise to the payment, to use the amount to pay plan expenses (assuming that plan has language permitting this), which benefits all current plan participants. You might, however, want to first assure yourself that this is the only check that will be received with respect to this fund family. Most likely, the settlement authority issuing the check knows only that the plan had an amount invested in the mutual funds in question, under the plan's EIN, and does not have the identities of the individual participants within the plan whose funds were invested in the offending funds.

[loserson]

Seems like the first to ask would be the payor.  And the lawyers for the payor, and whether they have the details of the settlement.  Somebody told the payor who to pay, and either the payor or that somebody backwards down the line must be able to identify why they cut you a check.

Could also try the SEC, especially if you can find the settlement details in this list of SEC press releases: https://www.sec.gov/news/pressreleases.  Might be easier to google "sec settlement press release" and the payor name, and see what happens.

The press release will list a responsible agent at the bottom.  You might struggle to contact them but at least it gives you some idea of an actual person who might know what's going on.

Any chance you have investment records dating back to 2001 so you can see who invested in what?

[chc93]

For $500 and over 15 years ago, maybe look at DOL Field Assistance Bulletin 2006-1.  As the FAB indicates in a somewhat similar situation, maybe you can send the check back, since administrative costs to try to do something with the $500 check will probably cost a lot more.