A plan with numerous investment choices is wanting to change providers. Unfortunately they are in funds which have back end loads or deferred sales charges. The partricipants accounts are going to be charged deferred sales fees ranging from 1% to 5%. Each paritipant will have different % fees based on how long the money has been in the account. My question: Is there any method legally that the participants can be made whole by the employer? And how would that be done. The employer is willing to pay those fees but the fees will be taken from the participant's accounts and I am not sure how the employer 1) gets the money into the plan without it being considered a contribution and 2) can it be allocated based on what each participant is charged.

see Revenue Ruling 2002-45 for some guidance. Sounds like they'll just have to make a contribution and get as close to "making them whole" as possible.