Sponsor's money commingled with plan assets in brokerage account

[Guest]

I have a client that set up a brokerage account under the name of the plan and the plan's federal identification number. I just found out from the client that the the owner of the company deposited some of her personal money into this account. How do I handle the comingled assets? This happened in 1999 and the 1999 employer contribution has already been made so I don't see how we could do any creative accounting.

[JohnCheek]

First, I would make sure the client removed all personal funds, and income earned thereon, from the account.

For reporting purposes, I would only report the assets and income of the Plan, even if the brokerage account erroneously had funds that did not belong to the plan.

Could this be a prohibited transaction? It's not really a loan; maybe the sponsor is dealing with plan assets for his own benefit,somehow benefitting by using the plan's brokerage account? I doubt it, too much of a stretch.