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  1. Actuarial vendor performs the annual actuarial valuation for a DB plan, and delivers the report to the sponsoring employer (i.e., the PA). Actuarial vendor then sends its invoice for services rendered. The plan provisions have always permitted the plan to pay reasonable expenses if not paid by the sponsor. "The trust fund shall be used for the exclusive benefit of the participants and their beneficiaries and to pay administrative expenses of the plan and trust to the extent not paid by the Hospital." In prior years, the sponsor has elected to have the plan pay some expenses, including fees from the actuary, but not necessarily the same each year. In some years the plan has paid expense X, Y, and Z, while in other years the plan has paid expense X and Y. For the current invoice, the sponsor does not pay promptly, nor is the invoice paid by the plan. A few months later, the sponsor declares chapter 11 bankruptcy. The sponsor also files for a PBGC distress termination (without involvement of this actuary). Sponsor refuses to pay the actuary's invoice, and refuses to send the invoice to the plan trustee for payment. Bankruptcy attorney says, “get in line, like everyone else”. Research includes ERISA sections 403 and 404, and DOL Advisory Opinion 2001-01A, Distress Termination instructions. Nothing appears to restrict the payment of reasonable administrative expenses in the event of bankruptcy. My view is that plan provisions require the sponsor to direct payment from the trust since the sponsor has not made the payment, but I’m willing to consider other viewpoints. Any comments or experience that you are willing to share?
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