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The group gets 15%, the doctor, however, is limited by 415.

I guess my age is showing. To me the concept of charging the participant for plan expenses is the "new and different" way of doing things. I miss the days when employers expected to pay those expenses!

Ignorance about investment liability is part of the problem. Employers take the apparent easy way out from a very small potential liability with great adverse consequences to most of the employees. I would use a military word that begins with "chicken" and has four more letters to describe the lack of effort and interest of most employers to properly assess the options and potential liability before making decisions about how plan assets will be managed. And most advisers to the employers are equally culpable.

I want to give a little more insight into why I take this position (FWIW). Earlier in my career, I actually left a daily provider to work for a Balanced Forward Provider (because balanced forward, at that time, seemed to provide the best opportunity to learn and apply all the rules). In a balanced forward environment, this would be a non-issue; the default would've happened on the December 31st valuation date. Applying many of these rules on a daily platform creates more of a challenge as everything is process prospectively while "compliance dates" or "as of dates" are used to illustrate the appropriate time-frame. When it comes to actually offsetting a loan, you'd have to actually back-date the offset; which can be done but operates against the normal operation of a daily platform. If a December 31st payroll comes in on January 8th, you'd then see that payment wasn't made and go back and process a retroactive default to December 31st (changing the Year End Reporting and each day loan balance between January 1st and January 7th. So, I agree with Bird on his argument that the Regulations are clear. I just see an potential issue on many daily platforms to administer this issue. A balanced forward platform could easily administer it because EVERYTHING is done on a accrual basis. I just wanted to add that insight because many "newbies" (and I can say that ) have never experienced a balance forward platform. Good Luck!

She can get 15%.

It is an abomination to have participant directed accounts. It is the expectation of ERISA that the investments be managed by a fiduciary (and its advisers). Since 403(b) plans come from the retail insurance rip-off tradition, it may seem strange that some protection and responsibility have emerged into the light.