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401k "prohibited transaction"?
Benefits & Compensation
401k "prohibited transaction"?
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Our 401k assets manager recently sent us a check which represents, basically, the interest on distribution checks between the time they were cut and the time they were cashed by the participants. Appa
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Forums  »  Topic Forums  »  Benefits & Compensation  »  401k "prohibited transaction"?

401k "prohibited transaction"?

posted at 6/30/2000 5:27 AM EDT
Posts: 11
First: 6/16/1999
Last: 12/12/2000
Our 401k assets manager recently sent us a check which represents, basically, the interest on distribution checks between the time they were cut and the time they were cashed by the participants. Apparently, their procedures caused this to happen and it shouldn't have happened.

What should we do with this money? Should it be returned to the terminated participants? What is our obligation to track them down? Can we split it among current participants? Should our assets manager cover any costs for this if this is something that shouldn't have happened.

Please help, I've never heard of this before! Thank you.
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