FishOn Posted May 6, 2024 Posted May 6, 2024 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?
Lou S. Posted May 6, 2024 Posted May 6, 2024 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?
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