We have a 85 participant pooled profit sharing plan with $17,000 in total assets. Employer wants to amend the plan to 'charge' the accounts of terminated participants an annual administrative fee the year beginning after the year after termination (Term 2020, fees start 2022 if account not fully paid out.) Since this is a pooled account would these expenses to the terminated participants accounts become additional earnings to the other participants or forfeitures to be re-allocated to active participants OR something else altogether?
I know the plan can be amended to allow for the expenses to be charged (must also send a notice to each participant regarding the change). Just not sure how to handle the recognition of the expense charges.
Thanks for any input. Really struggling with this.
Kathy Nichols
