M Norton Posted June 20, 2019 Posted June 20, 2019 Small plan - 8 participants including 1 HCE (owner), total assets around $175K. Plan sponsor made a deposit of EE deferrals, and check bounced. Sponsor replaced bad check and funds are in the plan. However, asset custodian charged small fee ($25) for returned check. Must plan sponsor reimburse plan for the returned check fee or can it be netted against earnings? What do the regs say? Thanks!
Popular Post Kevin C Posted June 21, 2019 Popular Post Posted June 21, 2019 I don't see how a fee resulting from the plan sponsor depositing a rubber check could possibly be considered a reasonable expense of administering the plan. ERISA 404(a)(1)(A)(ii). The plan sponsor needs to reimburse the plan. Belgarath, RatherBeGolfing, rr_sphr and 2 others 5
RatherBeGolfing Posted June 21, 2019 Posted June 21, 2019 No question the employer should reimburse the plan for the fee it caused by bouncing the check. The more important question is what happened to the EMPLOYEE assets in the account since they bounced a check of deferrals? Did the employer use employee contributions to cover business expenses? GOT2BME and rr_sphr 2
M Norton Posted June 27, 2019 Author Posted June 27, 2019 RatherBeGolfing - lost earnings were calculated on late deposit of employee deferrals - Employer to deposit lost earnings, plus Form 5330 prepared to calculate excise tax due Thanks.
Recommended Posts
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 accountSign in
Already have an account? Sign in here.
Sign In Now