Warrant Exercises in a Cash Balance Plan

We have an owner  only cash balance plan that purchases warrants but the warrants are never valued. The asset statements only show wire transfers out of the plan account for warrant exercises and does not show which warrants) are  being purchased by the wire transfer. How do we value the monies that are leaving the plans to purchase warrants if we don't know what was purchased? Is it shown as the value of the monies wired out of the plan or just as a loss on the assets for the year? Does the client have to request that their Financial Advisor  provide the current price for each warrant listed as the end of the plan year?


 

59 minutes ago, Dawn Marlar said:

How do we value the monies that are leaving the plans to purchase warrants if we don't know what was purchased? Is it shown as the value of the monies wired out of the plan or just as a loss on the assets for the year? Does the client have to request that their Financial Advisor  provide the current price for each warrant listed as the end of the plan year?


 

Who is this "we" you speak of?  It's up to the plan trustee to value the plan assets.  When I've had clients tell me something is worthless I ask them if they will give it to me.  This usually demonstrates that there is some value.  Client needs to assign a value, he or she may consult with the FA for help.  Warrants that have expired are worthless and just a loss, but not expired presumably could have value depending on the price of the underlying stock. 

It is the responsibility of the trustee to provide the value of all plan assets, how and where the trustee obtains those values is up to the trustee, but failure to do so accurately such that the plan's fair market value is not annually ascertained is a fiduciary breach in my opinion. Just because it is owner only doesn't mean (s)he can do whatever (s)he wants with the assets w/o accounting and accountability.