Error in Investment of Plan Assets

[Guest DBolling]

A Money Purchase plan has participant direction with pooled assets. A third party administrator made an error in calculating how much to invest in each fund and gave incorrect instructions to the plan sponsor for transferring assets among funds. Due to the error, the plan assets suffered a much larger loss than they would have if they had been invested correctly. Has anyone had a similar problem? Need suggestions for proper correction, which correction program is applicable, etc.

[stephen]

My experience has been that the party in error is usually asked to deposit the difference. To my knowldge none of the instances where this has occurred have they followed one of the "Correction Programs".

[Guest Jennifer Reid]

I agree. The plan participants must be made whole, and the trustee or named fiduciary of the plan has the duty to make sure this is done, even if it means bringing action against the party that committed the error to compel payment.