Exclusive Benefit Rule

[Guest TroyRiley]

The exclusive benefit rule mandates that, for qualified plans, no part of the corpus or income of the trust be diverted for any purpose, other than for the exclusive benefit of the participants and beneficiaries.

Here is my question:

If we cash out an account and a small contribution in an amount less than $1 comes in after the cash out, are we required to spend $5 to send another check, or can we write off these de minimus accounts? What if we have 100 participant accounts less than $1, and it would cost us $10,000 to mail all of the checks?

Thanks in advance.

Troy Riley

[Blinky the 3-eyed Fish]

This question has been asked before on these boards if you want to search. No deminimus amount in the statutues. If it cost me $100 per check, I would get a new bank.

[R. Butler]

That was I was thinking. Those are some expensive checks.