Allocating Investment Loss - how to use Weighted Balance method

[Lynn Campbell]

Is it possible, when allocating gains, to use "weighted balance (beginning year base)" in a Plan which has transfers between investments in mid-quarter? I value the 401(k) accounts each quarter, and this past quarter all investments had losses, and QT will not allow me to post the loss because it will not accept a negative balance in this participant's account (all funds in a participants's investment account were moved to another investment in the middle of this quarter). I would like to find a way to give this person their share of the loss from the investment they had for the first part of the quarter and "move" the loss to their new investment.

[Guest Sue Michalski]

I think the prior balance plus option might work for you. It gives you the option do put in a % for certain transactions in specific sources. For instance, you might want to give everyone 50% in the deferral source because the transfers took place mid quarter. Hopefully it would allocate based on the date of the transfer. But then you will have to do an additional transfer to move the rest of the $$ that got posted.

WE have also reversed out that initial transfer, posted gains using the prior balance plus, and then repost the transfer. Then you just have to move the difference between your initial transfer and your final transfer.