handling tardy reimbursement of fee overcharges

[Guest Iwonder]

A prior recordkeeper has just provided a check to the current recordkeeper, along with an explanation that the prior recordkeeper had overcharged participant accounts for the prior record-keeper's fees back in 2008. At that time, the recordkeeper’s fees were paid from plan assets.

The current recordkeeper, upon receiving an allocation breakdown from the plan sponsor, has been directed by the plan sponsor to deposit the overcharged fees pro rata into the appropriate participants' account.

The problem is: The correct money source into which the funds should be deposited for each affected participant.

It can't be in the employer's money source because the funds would be subject to a vesting schedule.

Should these assets be treated as pre-tax?

Any other alternatives?

Any guidance would be grately received and appreciated.

[TPAMan]

The current recordkeeper, upon receiving an allocation breakdown from the plan sponsor, has been directed by the plan sponsor to deposit the overcharged fees pro rata into the appropriate participants' account.

Isn't this the answer? Pro rata... across participant current source/fund balances? There should be no vesting or other issues. It is an earnings allocation.