Jump to content

Ineligible Participant with Contributions and Investment


Recommended Posts

We have a plan where the plan sponsor/trustee made a contribution on behalf of his daughter who is neither employed or received compensation from the plan sponsor. She is ineligible.  He then moved the contribution to a plan checking account and invested the money in a short term real estate loan along with his money.  The real estate loan/note is not a party-in-interest. 
What are the proper steps to correct this?
Link to comment
Share on other sites

Forfeit the money (along with earnings), allocate to participants as an employer contribution or reduce employer contributions per the Plan document.

It's a little unclear to me who the owner of the real estate note is. Plan holding account? Plan Pooled Account? FBO account of owner?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...