segregating 401(k) contributions but not investing them

[Santo Gold]

A company has a self-directed 401(k) planm but the assets are not in individual accounts, but are held in a pooled account. TPA produces quarterly report/statements.

Would it be acceptable if each month, the employer deposits the 401(k) money in a money market or plan checking account, but only transfers these monies into the proper funds (per employee investment direction) on a quarterly basis? By segregating the 401(k) monies from the company assets monthly, they will satisfy the ASAP/15 business day requirement. Are there any other cut and dry deadlines that pertain to the actual investment of 401(k) contributions, per the employees instructions?

[ERISAnut]

Nothing cut and dry. The idea of making the deposits into a plan's checking account is perfectly acceptable and recommended wherever possible. The gets the funds out of the employers control and into an ERISA protect trust.

Investment timing is a separate fiduciary issue. Hence any scrutiny would be based on a complete set of facts and circumstances (but nothing cut and dry). You may be less likely to meet the 404( c) standard; but who does?

[Guest Pensions in Paradise]

Not so fast. Department of Labor regulation 2510.3-102 requires that amounts that a participant has withheld from his or her wages by an employer be contributed to the plan on the earliest date on which such contributions can reasonably be segregated from the employer's general assets. Unless this is a large employer with multiple payroll sites, I can think of no reason why the employer cannot deposit the contributions to the checking account more frequently than monthly. It should be more like 2 to 3 days after each payroll.

[ERISAnut]

Not so fast. Department of Labor regulation 2510.3-102 requires that amounts that a participant has withheld from his or her wages by an employer be contributed to the plan on the earliest date on which such contributions can reasonably be segregated from the employer's general assets. Unless this is a large employer with multiple payroll sites, I can think of no reason why the employer cannot deposit the contributions to the checking account more frequently than monthly. It should be more like 2 to 3 days after each payroll.

We are merely distinguishing between depositing the assets into the PLAN's checking account and INVESTING the assets pursuant to each participant's investment elections. Once the amounts are DEPOSITED into the PLAN's checking account, 2510.3-102 is satisfied. I did not offer an opinion on how long is "as soon as administratively feasible". The individual asking the question seemed to have been combining two distinct processes; Segregating the assets and investing the assets.

Can we speed up now?

[Guest Pensions in Paradise]

Sure we can speed up, but if the employer keeps depositing monthly they're gonna get a ticket from the DOL!!

[Santo Gold]

ERISAnut is correct, I was referrering to 2 separate transactions; #1 segregating the assets, #2 investing according to the participant choices. I understand the timing hurdles for #1, but was checking what the hurdles are for #2.

Thanks to all for taking the time to reply.

[WDIK]

I understand the timing hurdles for #1

I agree with Pensions in Paradise, monthly deposits will not generally pass muster.

self-directed 401(k) planm but the assets are not in individual accounts, but are held in a pooled account....but was checking what the hurdles are for #2.

First, could you describe the the nature of the "pooled account" in a little more detail. I'm not sure if you are referring to some type of annuity product with multiple fund investment options or a single investment account where the trustee authorizes investments based on the participant elections.

Second, if I were a fiduciary in this situation, I would not want to be placed in the position of trying to justify why, if participants are empowered to make their own investments elections, funds were sitting in a money market or non-interest bearing checking account for months, if they could have reasonably been invested.

[ERISAnut]

You know, the key to being a good consultant is knowing what question is being asked.

His question was not about debating the timing of deposits; but merely to determine if deposit timing and investment timing were synonymous. THEY ARE NOT.

It was even reiterated that his ASAP/15 business day comment was merely a lead-in to the more important question; and not to open a debate about what ASAP/15 business days means.

What now, you we debate what question could be "more important" than the ASAP/15 business day question?

[WDIK]

You know, the key to being a good consultant is knowing what question is being asked.

Perhaps the key to being a great consultant is knowing what questions should be asked.

Regardless, ignoring "Hurdle 1", I still have the same concerns as posted above for "Hurdle 2."

(This post is not meant to imply that I, personally, am a great, or even mediocre, consultant.)

[ERISAnut]

Again,

The useless debate on simple principles that are understood; but irrelevant. Amazing.

Good versus Great, how interesting

And by the way, my post is meant to imply that I feel great about my abilities as a consultant; semantics aside

[WDIK]

It is obvious that you understand a great deal more than I do, as evidenced by your 39 posts (and counting) in a 24 hour period, which must be some type of record for these boards.

[ERISAnut]

So are we talking about my character now?

It's always the weakest among us start this nonsense.

[GBurns]

Although I do think that it is only proper to fill in any "blanks" that we might see in any post or request for an opinion.

ASAP/15 arguably not being the issue and being understood, we still have issue #2, the funding of the investment as per the employee's request (investment timing).

I think it would be hard to explain why the funds can be transferred to a money market fund but not to the employee's chosen investment. It should be even harder to explain why it takes a whole Quarter to then send that money to the chosen Fund. As implied by WDIK, there should be serious fiduciary liability issues.

Additionally, from what I recall, the employer's agreement should have wording to the effect that the contributions will be remitted to the chosen fund in a timely manner if not in a specified time. What wording is there on the Salary Reduction agreement, Adoption Agreement and the Services Agreement etc?

So, IMHO, even if there is no specific regulatory guidance, there should be some contractual provision that should address this anyhow. I cannot imagine the remittance of an employee deferral being left up to the whim and fancy of an employer or plan.

[Guest BXO]

Regardless of what you think the "question" is in the initial post, this statement should not go unchallenged:

By segregating the 401(k) monies from the company assets monthly, they will satisfy the ASAP/15 business day requirement

Haranguing someone who points out the flaws in that sentence, part of a relatively concise fact set, is unwarranted.

[ERISAnut]

But to apply your own definition to monthly which is obviously different from the definintion meant by the person asking the question creates a useless debate.

By monthly, I assumed it was implied that within each month (perhaps even the same day) and then answered the question that was being asked. The person asking the question confirmed that the term monthly was not the issue.

You are concluding from his statements that the deferrals aren't being separated on the same day they are being withheld from participants' compensation. I did not make that assumption as the comment was a pure lead-in to a good question.

That question was, can you distinguish between segregating assets and investing assets. The answer to that question is Yes. Segregating assets is a different function than investing asset and different sets of facts and circumstances apply to each.

How can you not understand this?

[Guest BXO]

You are entertaining.

I hope you understand the assumptions behind that.

[GBurns]

ERISAnut

It seems that you might be arguing with yourself.

I also notice that regarding issue # 2 you keep going over the same ground but never offering a solution or an opinion.

We know that issue #2 is a separate issue. So what do you advise or opine?

I hope that you do realize that no one has to address both or all or any of the issues when they post to the thread. They are free to address what they please and opine as they please, subject only to the Moderator. I think that is called freedom of expression. If they want to expand on a post by offering what they see as a correction, filling in the blanks, or answering the unasked, that is their right, isn't it?

Why worry about someone else's post that you do not agree with or sometimes might not understand? Unless it is a personal type attack, let it slide.

Anyhow, welcome to the Board. I do not know how long you might have been lurking before posting, but you might want to consider toning down your enthusiasm for posting. It seems, and this is just my opinion, that new posters are not as adept at posting and at Board etiquette initially. It takes some time and practice to develop your posting style especially since writing short opinion blurbs/responses on such short notice is not something that most people do or have done before.

Now you others, be nice, please.

[J2D2]

Don't you love irony?!

[wsp]

I think it would be hard to explain why the funds can be transferred to a money market fund but not to the employee's chosen investment. It should be even harder to explain why it takes a whole Quarter to then send that money to the chosen Fund. As implied by WDIK, there should be serious fiduciary liability issues.

Exactly...

Last year a client of mine, that immediately segregates their deposits, was picked for a random DOL audit on their contribution deposits. Fortunately this client rarely took more than 3-5 days to deposit the money into the respective assets. The auditor actually checked both that the money was segregated AND that the money was deposited into the final intended destination. When asked what was reasonable time frame for this I got the "ASAP" response. But, the mere fact that she checked the dates on the asset statements tells me that the DOL considers this a part of the entire segregation process.

So, in this case, IMHO it's justified to take the conversation beyond the initial question. If they're checking it...you'd better be doing it.

[Santo Gold]

I guess it doesn't surprise me that an auditor would check on both segragating and final investment destination.

Although my question was mainly about hurdle #2, I have to admit about not having completely understood hurdle #1. I thought that the deadline was assets being segregated ASAP in the month following when the 401(k) contributions occured, but no later than the 15th business day of the month following withholding.

So, In other words, If the company's payroll is May 5th, the 401(k) contributions have to be segregated ASAP on or after May 5th, but no later than the 15th business day of June. Is that correct?

As for depositing those May 5th contributions into the proper investments, that would be anothe ASAP?

Thanks to all for the responses.

[GBurns]

Think about it.

Of what use would it be to just segregate the money? The purpose of the rule was to get the employee's money to where it was agreed to send it, namely, the selected investment. This money either belongs to the employee (employee deferral) or was promised (employer match etc) to the employee. It no longer is the employer's money, is it?

Taking from the employer and depositing it into the plan's account would still not get it to where it was originally agreed that it should go. It was agreed that it should go to the selected investment.

As I see it, the purpose or intent of the rule was to get the money to the investment asap. So just getting it from the employer's general assets etc would not complete the picture and satisfy the intent. That means that BOTH the segregation and the depositing to the investment have to be considered together.

[ERISAnut]

I would strongly disagree. Again, these are two distinct standards. The 1st standard is more along the lines of the prohibited transaction issue as the DOL views amounts that are withheld from employee pay as a plan asset at the time they are withheld. Accordingly, the DOL does not condone the employer holding on to plan assets any longer than necessary. This is why the correction is along the lines of a prohibited transaction.

The investment of plan assets is another fiduciary standard.

[wsp]

As for depositing those May 5th contributions into the proper investments, that would be anothe ASAP?

Thanks to all for the responses.

That's what I took out of the audit.

Of course it's all subjective as, obviously, they are keying on the ASAP phrase and that's up to the individual auditor.

[GBurns]

You disagree with what?

Whether or not there are 2 standards is irrelevant. My car uses both oil and coolant. That they are different is understood but irrelevant. When fluid levels are checked BOTH are checked.

As a previous poster experienced in an audit, BOTH get checked. It did not matter that there were different standards.

In any case, you still have not pointed out what these standards are and their application as far as this thread is concerned.

You stated that "This is why the correction is along the lines of a prohibited transaction" regarding the segregation issue, but you again evaded the other issue. How would the investment delay issue be resolved?

[ERISAnut]

As a former Pension Investigator for the DOL, I would like to know who the auditor was.

[wsp]

As a former Pension Investigator for the DOL, I would like to know who the auditor was.

Surely you jest....and exactly why is the name of the auditor germane to this? What does your prior job history have to do with anything? And more importantly, you can't possibly think that such information would be disclosed on a message board; or to anyone for that matter.

Don't like it what I personally took from the audit...that's fine. Remember, I offered the example as my own opinion. You don't have to agree with it and that's fine. Say "I don't agree with you", but don't question my integrity.

[david rigby]

w/r/t the question of investing EE deferrals in the selected funds (issue #1 or issue # 2? I forget), has anyone bothered to check the plan document?

[Guest Pensions in Paradise]

Santo (and anyone else who is not clear on this issue) - the 15th day of the following month is NOT a safe harbor. The rule has always been that 401(k) deferrals must be deposited as soon as administratively feasible. IMHO, if the client takes more than 3-4 business days to deposit deferrals they are playing with fire and will eventually get burned.

[GBurns]

Pensions in Paradise

Where can I find an explanation of what is meant by "deposited" ? Deposited where, why and for what purpose?

[ERISAnut]

As a former Pension Investigator for the DOL, I would like to know who the auditor was.

Surely you jest....and exactly why is the name of the auditor germane to this? What does your prior job history have to do with anything? And more importantly, you can't possibly think that such information would be disclosed on a message board; or to anyone for that matter.

Don't like it what I personally took from the audit...that's fine. Remember, I offered the example as my own opinion. You don't have to agree with it and that's fine. Say "I don't agree with you", but don't question my integrity.

It implies that if I want to know about a subject, I would be better served talking to a source with direct experience relating to that subject. I felt that it shouldn't take the work of a DOL employee who enforced the same provisions that are being questioned here to explain the difference between segregating amounts withheld from employees pay and the mere investing of those funds. But, I see that some people find comfort in confusion.

[Guest Pensions in Paradise]

GBurns - the following is from the 2000 ASPA conference. Hopefully this answers your questions.

Q31: Can the employer open a checking account for the trust and make weekly deposits of deferrals to this non-interest bearing account, and then monthly send a check to the mutual funds to be invested as per the participants' directions?

A: The deposit of 401(k) deferrals into a bank account established in the name of the trust for the plan will satisfy the requirement under the plan asset regulations to deposit the employee contributions into trust. At this point, the situation presented in the question raises issues of prudence under ERISA Section 404. Relevant factors will include how long the assets are held in a non-interest bearing account and why a non-interest bearing account has been chosen in the first place. For Section 404© purposes, the situation presents a question as to whether the plan participants have actual control over the investment of the assets while they are held in the bank account as well as the fact that, during the period of time the assets are in the bank account, they are not being invested in accordance with the participant investment directions.

Department of Labor regulation 2510.3-102 requires that amounts that a participant has withheld from his or her wages by an employer be contributed to the plan on the earliest date on which such contributions can reasonably be segregated from the employer’s general assets. Except for SIMPLE IRAs, employee deferrals must be segregated from employer assets no later than the 15th business day of the month following the month in which they would otherwise have been payable to the participant in cash. Note that the 15th business day is not a safe harbor, it is the maximum time period. If DOL feels that the employer could have segregated the deferrals earlier than the 15th business day after the end of the month, DOL will assess penalties from the date it determines the deferrals could have been segregated, and not from the 15th business day.

[wsp]

All good and well....but the OP asked about monthly deposits and quarterly transfers. Hard to justify this one unless your dealing with multiple locations with multiple payroll cycles. Somewhere along the line in this thread the time frame for transfer went from quarterly to monthly and that's significantly different question.

Realizing that it's completly subjective and up to the DOL investigator... could you see a small company ever being able to justify a quarterly deposit even if it was in an interest bearing account? Given the systems advances over the last decade (and the fact that the split and directions can be done using Excel and Word in 1/2 hour at most), I'm having a hard time with that time frame.

So it comes down to this...can the DOL decide on their own (during an audit) if a breach has occurred and force the company to pay for lost earnings -or- must the participants bring suit and have the courts decide? And, since the money is in a trust account there is really no reward for this liability risk...why would you do it?

[Guest Pensions in Paradise]

wsp - you and I are on the same page on this issue. The plan sponsor MUST deposit the contributions ASAP in accordance with DOL regulations, and the plan sponsor SHOULD invest the contributions ASAP to comply with its fiduciary responsibilities. My personal opinion is that the plan sponsor should be depositing/investing the contributions within 2 to 3 days after each payroll. But the bottom line is that there is no DOL guidance which states that contributions have to be invested within a certain timeframe. Only that they have to be deposited within a certain timeframe.

[GBurns]

PiP

Thank you. It helps but it still leaves me with the issues of fiduciary responsibility to follow the participant's directive, namely to send the money to the selected investment. Sitting in a Trust etc does not meet that requirement and while it is there it also is not under the control of the plan participant who owns that money.

I wonder if anyone knows of or can easily find any cases where the DoL did do what wsp wonders about and fined etc for a breach or any court cases.

As wsp puts it "And, since the money is in a trust account there is really no reward for this liability risk...why would you do it? ".

[wsp]

I wonder if anyone knows of or can easily find any cases where the DoL did do what wsp wonders about and fined etc for a breach or any court cases.

If anyone has access to cases heard before the 9th Circuit Ct. of Appeals prior to 1999 and can post

Carich v. James River Corp., 958 F.2d 861 (9th Cir. 1992)

We just might find our answer. Though it still won't tell us if the DOL will proactively seek out to enforce instances where they feel there has been fiduciary irresponsibility. Anyone???

[GBurns]

I guess this case shows that it is not the amount of money involved that counts, it is the principle, and it applies to both issues, the segregation and the deposit.

.

I also wonder whether the use of a non-interest bearing account really mattered.

http://www.mhco.com/Commentary/2006/DOL_De...eded_060806.htm

Does anyone know which case this was?

[Guest mjb]

Could someone answer a Q (regardless of whether the funds can be held in a checking account of the trust for an extended perod after receipt by the employer under dol rules)- what advantage is there to do so? Every fund provider who sponsors plans that I am familiar with have simple processes for employers to submit the funds directly upon payroll (usually electronically) in order for the fund to start managing the money and collect mgt fees. What kind of 401k plan would an employer have to maintain in order for this kind of delay, e.g. quarterly investment to be necessary or desireable?

[Guest Green92]

Could someone answer a Q (regardless of whether the funds can be held in a checking account of the trust for an extended perod after receipt by the employer under dol rules)- what advantage is there to do so? Every fund provider who sponsors plans that I am familiar with have simple processes for employers to submit the funds directly upon payroll (usually electronically) in order for the fund to start managing the money and collect mgt fees. What kind of 401k plan would an employer have to maintain in order for this kind of delay, e.g. quarterly investment to be necessary or desireable?

I do know of one TPA/Custodian that charges plan sponsors for deposits more frequent than monthly. For one small company/start up plan I recently got a quote for it would have been an extra $35 per week (pay period) to deposit $740 per pay period. I thought it was a bit steep, but then again maybe I'm wrong.

[Guest cs006b]

Folks,

Does anyone know how the DOL looks upon a plan that delays a payroll deposit as a result of a conversion to a new provider? The provider will not accept such contributions during the blackout period so this is through no fault of the plan sponsor. Is the trouble of setting up a segregated bank account worth it for one deposit or is it no big deal since there is a conversion? Thanks

[Kirk Maldonado]

Lawrence J. CARICH, Plaintiff-Appellant, v. JAMES RIVER CORPORATION, A Virginia Corporation Administrator of the Crown Zellerbach Salaried Employees Retirement Savings Plan, Defendant-Appellee., 02/03/1992

--------------------------------------------------------------------------------

Carich v. James River Corp., 958 F2d 861 (9th Cir. 1991).

Henry Kantor, Pozzi, Wilson, Atchison, O'Leary & Conboy, Portland, Or., for plaintiff-appellant.

Steven J. Nemirow, Spears, Lubersky, Campbell, Bledsoe, Anderson & Young, Portland, Or., for defendant-appellee.

Appeal from the United States District Court for the District of Oregon.

ERISA employee benefits plan participant filed an action to recover the difference between the value of stock at the time he reasonably expected that the stock would be sold and the date of sale. The United States District Court for the District of Oregon, Owen M. Panner, J., found for plan administrator, and participant appealed. The Court of Appeals, Schroeder, Circuit Judge, held that: (1) remand was needed to determine whether plan administrator and fiduciarys in handling the plan participant's stock transfer request was unreasonable, and (2) the risk of delay and problems resulting from changes in plan administrative procedures for stock transfers were risks to be borne by the party responsible for choosing the administrators, not by plan participants.

Reversed and remanded.

Before GOODWIN, SCHROEDER and NOONAN, Circuit Judges.

SCHROEDER, Circuit Judge:

Lawrence J. Carich appeals the district court's summary judgment dismissal of his claim for benefits under ERISA, 29 U.S.C. § 1132(a) . Defendant-appellee James River Corporation (James River), is the administrator and fiduciary of the James River II, Inc. Salaried Employees Retirement Savings Plan (Plan). The Plan is made up of a number of funds. Carich, a participant in the Plan, in January of 1987, asked the Plan to transfer the value of his ownership of stock in the Common Stock Fund to the Fixed Income Investment Fund. Using a form supplied by the Plan, he directed that the transfer become effective March 31, 1987. Such a transfer, however, required the Plan Administrator to sell stock, and the sale was not in fact accomplished until June 3, 1987. Unfortunately, during the month of May the stock declined in value. Carich filed this suit to recover approximately $24,000, representing the difference between the value of stock when it was sold in June and its value at the time he reasonably expected the transfer to take place.

The district court viewed the issue to be whether the Plan Administrator acted arbitrarily or capriciously in valuing the stock as of the date of sale rather than as of March 31, 1987. It held that the valuation was not arbitrary or capricious because the Plan Document provided that James River could elect to value shares as of the date of sale, and because the Administrator notified participants that the Plan was changing its method of valuation.

In his appeal Carich argues that he reasonably expected transferred funds to be valued as of approximately March 31 in accordance with his direction, and, further, that he could not have anticipated that the transfer would be valued as of a date more than four months after he had submitted the transfer request. Evidence in the record suggests that the length of time that elapsed before the sale was consummated was excessive.

[1] [2] The district court, however, agreed with the position espoused by James River that according to the Plan documents, the Plan was entitled to value the stock as of the date of sale, regardless of the delay resulting from any improper handling of the participant's request. We conclude that such a result would give the Plan and its Administrator unlimited discretion in the handling of Fund transfers and is contrary to the principles underlying ERISA. See 29 U.S.C. § 1104(a)(1) . See also Local Union 598 etc. v. J.A. Jones Construction Co., 846 F.2d 1213, 1217 (9th Cir.1988) (ERISA designed to protect employee interest in pension and welfare plans through uniform reporting, disclosure and fiduciary responsibility standards); Blau v. Del Monte Corp., 748 F.2d 1348, 1353 (9th Cir.1984) (plan administrator has no discretion to flout fiduciary obligations imposed by ERISA). We therefore reverse and remand to the district court for further proceedings to determine the merits of the plaintiff's claim that the defendant delayed excessively in processing the fund transfer request.

The events leading up to this controversy occurred in 1986, when the defendant James River Corporation acquired Crown Zellerbach, the company which had employed Carich for many years. As a result of this acquisition, the Crown Zellerbach Salaried Employees Retirement Plan became a part of the James River II, Inc. Salaried Employees Benefit Plan. James River, as Administrator of the Plan, instituted certain changes that affected transfers of interest between funds. Up until July 1, 1986, a request from a participant like Mr. Carich, for the transfer of interest from the Stock Fund to the Income Fund, was accomplished by the Plan Administrator without any actual sale of stock on the open market. Effective July 1, 1986, however, James River suspended employee and employer contributions to the Crown Zellerbach Plan. After that time, transfers from a participant's Stock Fund required the actual sale of stock. Prior to that date, stock transfers were effective as of the last day of the calendar quarter. After July 1, 1986, transfers were to be effective as of the date of the sale of the stock and the interest transferred was valued accordingly.

The James River Plan Document itself authorized this change in the method of valuation, since it provided that when a transfer of account balances involved the sale of stock, James River had the discretion to value the shares at the actual amount realized from the sale. Section 8(d)(ii) of the Plan Document provided: * * * (ii) if shares of Stock are sold to provide cash needed for transfer, James River, in its discretion, may instruct the Trustee to value such shares at the amount realized therefore * * *.

In a letter dated May 23, 1986, the so-called “Sperling letter,” the Vice President of James River wrote to all “Crown Zellerbach/James River Employees participating in the Crown Zellerbach Retirement Savings Plan,” explaining that effective July 1, 1986, contributions to that plan would be suspended and valuation procedures changed. The notification letter said in pertinent part: The “Valuation Date” for any transaction involving shares of stock will be the actual date of sale or purchase of shares, rather than the last day of the month.

Neither the Sperling letter nor the Plan Document stated how much time it would take to process requests for transfers in the event stock needed to be sold, nor did either the Sperling letter or the Plan Document notify participants that more time would be required if the sale of stock were involved. The Sperling letter did not explain which transactions would involve shares of stock and hence trigger valuation as of the actual date of sale or purchase of shares. The letter did state that “transfers between your James River Stock Account and the Income Fund are permitted on a quarterly basis.” There was, in short, no way for Mr. Carich to know, when he submitted his “Inter-Fund Transfer of Balances Form” on January 23, 1987, that he was in fact requesting a sale of stock that would not take place until June.

Carich contends that he submitted his request on January 23, 1987, on a form provided by the defendant. The form itself had a blank where the “effective date of transfer” was to be shown. Carich alleges he spoke to employees of the defendant and was told that the effective date would be March 31 and that, according to his direction, the form was typed to reflect that date. Above the signature line was a form statement advising both Carich and James River as follows: “I understand that the amounts of the transfers are based on the market value of my employee account(s) as of the effective date of transfer.” Thus, although Carich could not have anticipated a June sale, the defendant James River, for its part, should have known that Carich was asking for the transfer to be effective March 31, 1987.

[3] James River explains its delay in effecting the sale of stock, and hence the account transfer, by pointing out that it had hired a new recordkeeper to administer the accounts, that this was a transition period in that administration, and that the Plan Administrator needed time to accumulate transfer requests in order to save brokerage fees on stock sales. Those facts are not disputed. This problem may well have arisen because new administrators took longer than they should have to turn around initial requests for stock transfers. That is a risk, however, to be borne by the party responsible for choosing the administrators, not a risk to be borne by a plan participant. Batchelor v. Oak Hill Medical Group, 870 F.2d 1446, 1449 (9th Cir.1989) (third party responsible for establishing pension had duty regarding selection and retention of fund administrator); Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1325 (9th Cir.1985) (Corporation had fiduciary duty, and could be liable with respect to selection of Plan Administrator). In the absence of notice as to the likelihood of delay, Carich would appear on this record to have been entitled to have the transfer made as of March 31, or at least within a reasonable period after his request. James River, however, disputes Carich's version of what occurred on Jan. 23, 1987, and suggests that Carich may not have reasonably expected the transfer to occur as of March 31 or shortly thereafter. Carich has not moved for summary judgment because issues of fact remain to be determined.

The JUDGMENT of the district court is REVERSED AND THE MATTER IS REMANDED FOR FURTHER PROCEEDINGS ON THE MERITS OF PLAINTIFF'S CLAIM.

[RTK]

cs: had plan where contributions late because where new provider could not process contributions (although for far longer than a "normal" conversion and outside the 15 business day rule). DOL auditor did not care -- contributions are plan asset and need to be held in trust.