From Sal's ERISA Outline book, Chapter 14

PTE 80-26 permits interest free loans to the plan by a party in interest to be used for the payment of ordinary operating expenses, or for a purpose that is incidental to the operation of a plan. If it is for incidental expenses, it can not be for more than three business days. The DOL did cite an overdraft as being incidental.

QUESTIONS:
What happens if the trust is overdrafted for more than three days?
What about excess cash? Should it be treated the same way?
Is there any other cites/articles/anything that deals with this issue?
How does your company handle overdrafts?

There was an advisory opinion issued to American Bankers Association last year:

http://www.dol.gov/ebsa/regs/aos/ao2003-02a.html

Thanks Katherine!

Are there any recordkeepers out there that can tell me what your policy is regarding overdrafts?