Settlor Functions paid out of 401k Plan Assets Cause Fines and Repayments. Louis LiBrandi of the employee benefits accounting firm PKF O’Connor Davies explains the difference between settlor and administrative functions. If plan assets are used to pay settlor functions then the plan sponsor must make the plan whole and also faces fines as a result of the fiduciary breach.
Initiatives by the DOL can often start locally and some regions have focused on the misuse of plan assets to pay for services that benefit the employer, not the employees. So what are the differences between settlor and administrative functions? Is plan design, particularly setting up the auto-plan, a settlor or administrative function? Are plan documents up to date to allow for payment of administrative functions by plan assets?
Watch this enlightening video to learn more from a former IRS examiner.