Who is entitled to money earned from a correction of a mistake?

[Guest Cliff Langwith]

A correction of a request by a plan participant resulted in a gain of $48,000. The employer claims this windfall should be used to pay plan expenses, not allocated to remaining active employees. What is the law regarding money gained in this way? Who is entitled to it? I know the trustee cannot benefit from administrative mistakes in their favor, but can the employer?

[bzorc]

In my experience, if the mistake results in a gain, or a benefit to the participants, the gain is given to the people. If the mistake results in a loss, than the party making the mistake (TPA, trustee, etc.) is responsible for making the participants whole. This is especially true in daily valued plans, where a miskeyed form could result in major liability! However, it also applies to a traditional balance forward plan as well, as employers become more aware of mistakes with the major changes in the stock market.