How do you allocate the interest (or "float") from instituti

[John A]

For any of you that deal with several plans that invest in an institutional account, how do you allocate interest from the "float" in the brokerage account for the minimal time that money is in the brokerage account before getting invested in funds? Does all money in every fund share equally in this interest? Does it matter what source (profit sharing, deferral, etc.) the money is in as to whether or not it shares in the brokerage account interest?

[Guest]

I have seen any interest that is earned during the time the money hits the account until it is allocated to the investments handled in a couple of ways. First, is to allocate to those participants based on their prorata share of the total assets. If there is no breakdown by source, then you would just allocate to the participant based on their account balance to the total. This may be done outside of your recordkeeping system in a spreadsheet. If you have the breakdown by source there, then you can do a further breakdown by source.

Second, I've seen the interest stay in the plan and then it is used to offset fees. There is no allocation in this case and the interest or gain is withdrawn from the account.

Hope this helps.

[Guest Jeff V]

We use a different clearing account for each fund in each plan.