Contribution vs. Restorative Payments

[Guest philc]

Plan is changing carriers and there will be a market value adjustment assessed against the "fixed" fund. The employer wants to pay the adjustment (small amount) to make participants in that fund whole. Seems fairly clear that this would be a contribution vs. a restorative payment.

What would seem fair, equitable and acceptable would be to make the payment only for participants in the fixed fund in the amount their account was reduced.

But if the amount being restored is considered a contribution, doesn't the allocation of that amount have to follow the terms of the plan re- allocating employer contributions (e.g. comp/comp)? If so, some participants who weren't in that fund could be getting an allocation.

I have looked at RR 2002-45 and the PLRs and they seem to deal with what is/isn't a restorative payment but haven't seen anything that deals with the payment as a contribution and how it would be allocated.

How have others done this?