Debit Cash Balance in Trust Account

[Guest Bosco108]

I know this question may have been posed before, but...

Does ERISA preclude retirement plans from purchasing plan assets without available funding? In other words, trades to buy mutual funds are made today, but plan sponsor does not send in funding until a week later. It "smells" like an indirect margin loan from the financial institution to the plan which may be a PT but I cannot find anything which would confirm or refute this logic.

Any thoughts?

[ETA Consulting LLC]

You're saying it is "debt financed property" in the plan. Before I go there, I'd question what is going on with the procedures to allow that. Did a trade go through and the ACH to the employer's checking account fail to go through? A process failure wouldn't immediately become a major compliance issue if corrected immediately. But, the practice of arbitrarily making purchases without attempting to have the funds available could create an issue.

Good Luck!

[david rigby]

Is the person desiring to engage in this transaction a member of Congress?

[mbozek]

I know this question may have been posed before, but...

Does ERISA preclude retirement plans from purchasing plan assets without available funding? In other words, trades to buy mutual funds are made today, but plan sponsor does not send in funding until a week later. It "smells" like an indirect margin loan from the financial institution to the plan which may be a PT but I cannot find anything which would confirm or refute this logic.

Any thoughts?

I dont understand how this can be done. I dont think the MF will wait a week to be paid for a purchase that was confirmed and I dont think that margin loans are allowed to purchase MF in a retirement plan b/c retirement benefits cannot be subject to alienation or assignment.

So what exaactly is going on here?