rjterpstra19

Ultimately, the fee isn't being paid by the client. It is being paid by the participant. I don't necessarily see the sense in waiving a fee for our time when it still takes time as others have suggested. Then where do you keep the fee in place? A $50 fee on a $55 deposit? Waive it below $50? Then you're not consistently following the engagement letter and that opens up other questions in event of an audit. Anyhow I appreciate everyone's feedback. It's more or less what I expected, but figured I'd ask to see if there was any sort of guidance I might have overlooked.

I have a client with a former employee who worked a half day in 2024 as a substitute. The employee was eligible and they have a safe harbor non-elective provision. The 3% contribution would be ~$15. My understanding is the letter of the law so to speak requires the $15 deposit. I have an ethical issue asking the client to make this deposit when the force out distribution will generate a fee from the record keeper (or us the TPA) that exceeds the balance of the account. Me: Client you need to make this deposit. Also Me: Thanks that is my money now as a fee. Is there a standard practice for how to handle these types of situations?