Sometimes a plan has stale dated checks, or settlement checks from funds. When that happens, they are deposited into an unallocated asset category. Which means, those funds end up sitting still and not doing anything to benefit an investment strategy or account.

The unallocated funds will vary in amounts and may not even be worth the cost in analyzing where to allocate them so that they are actively working to provide a return on investment. When this is the case, it’s far easier to set the funds up so that they are used to pay plan expenses.

In a situation where the unallocated funds are in larger amounts, it’s a better idea to have an outside IRA set up on behalf of the participants involved, and then distributing these funds.

The goal here is to ensure the funds are benefiting all of the participants involved in a plan no matter the size of the unallocated assets. Whether they’re set up to be used as plan expense payments, or distributed using an IRA, you want the funds to be working for you, and not sitting around doing nothing.

Your current investment strategy may have an “unallocated funds” section and you can see there are standing assets there. If this is the case, it’s a good idea to give us a call since it’s clear those funds are not doing anything to benefit your investments.