457 Plan Employr Reimbursement - 457(g) Violation?

[Guest texastax]

Is the exclusive benefit rule of 457(g) violated if a governmental sponsor reimburses itself from 457 plan assets for amounts it paid out to participants from its own general assets because of a long delay from the insurance company who held the plan assets? Contributions to the Plan are made solely by the participants--thus, future employer contributions to the plan cannot be offset. Since the participants were paid the distributions that they were entitled to, can the employer simply be reimbursed from the plan once the funds are released by the insurance company without violating the exclusive benefit rule, or does all of the money have to stay within the Plan? Also, if the money does have to stay in the Plan, does it have to stay in the accounts of the participants who received the distributions, or can it offset administrative expenses associated with the Plan? The employer was only trying to accomodate the distribution requests to the participants in a timely manner. The plan documents do not address the issue. Any comments would be greatly appreciated.