Nonexempt transaction Party-in-interest

[jason]

A 401k plan closed a bank account and transferred the funds to their Defined Benefit bank account.  Six months later the funds plus interest earned were transferred back to a new 401k bank account.

Should this transaction be reported on Schedule G as a non-exempt transaction?  or can it be recorded as a "mistake" in the auditors report?

 

[Peter Gulia]

To treat what happened as a mistake and not a transaction, the plan’s administrator would do a prudent investigation to satisfy itself that it understands what happened and finds the reporting would be truthful and not misleading.

 

And recognizing that a prohibited transaction or a fiduciary’s lack of control always matters for a plan’s financial statements (even if all amounts are immaterial or even insignificant), the independent qualified public accountant might have some responsibilities.

 

Further, a plan’s administrator might prefer to report a transaction (and its correction) in a Form 5500 schedule and in the IQPA report’s narrative.  Doing so might result in the Secretary of Labor having knowledge that triggers ERISA § 413’s three-year statute of limitations.