Client deposited profit sharing monies to safe harbor account and safe harbor monies to profit sharing account.

[Fibonacci]

I am surprised I have never had this issue.  I have a client who deposited funds the  profit sharing allocations of the participants into their safe harbor accounts and safe harbor allocations into profit sharing accounts.  The funds are held at John Hancock. Is there a way to correct this?  I just want to transfer the difference between the accounts.  Should there be an effort to estimate the earnings and move those funds as well?  I do not recall reading about corrective measures in this situation.

[Lou S.]

Contact John Hancock for a source correction. It's not that complicated and they might even be able to do it as of the deposit date so the earnings work out right. Talk to your account rep, they can probably walk you through it.

[justanotheradmin]

Just to be clear for anyone reading who hasn't encountered this - in this case there is nothing to actually move. The money gets recoded as a different type. Sometimes folks think investments will actually be liquidated and reinvested, and that is not the case if clear instructions are given and the recordkeeper (Hancock) does it correctly.