401(k)--charging former ees

Paige

I received a letter from our 401(k) broker stating that the DOL has released new guidance regarding the charging of fees for qualified plan expenses. Specifically, the new guidance allows former plan participants to be charged for the processing of benefit payments (i.e., termination packages).

Has anyone heard of this? Do you charge former employees for these expenses?

Pork

PAIGE: Part of doing business. We do not charge the ee for plan expenses; however, that expense is taken out of the company "profit sharing" subjective award, at the end of the year. So in that sense, the current plan members suffer the lessened amount available for distribution to plan members. Administrative expense paid by the company, I believe is a Tax write off for the company, if the company chooses to pay the expense. My present company always "eats" all 401K plan expenses and then decides how much profit sharing is available. I am not on the board of directors for the fund, but it still tells me the subjective amount awarded is reduced by the actions of the Board. I'll never know to far down the ladder to get in on that information.

PORK