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Are church plans subject to limits on plan expenses?

Guest jdw

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Since Church plans are exempt from ERISA, the usual "reasonable" standrds and prohibited transaction rules do not apply. Other than the exclusive benefit rule, what limits the expenses charged to church plan participants?

My situation is a regional church organization sponsors a plan that local congregations participate in for the local's paid staff. Regional employees provide all the administrative functions (processing contributions, distributions, participant questions, etc.) excpet for investment management services. Regional org wants to charge expenses of doing so to the plan.

What limits will apply?

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Guest Patrick Foley

Although Code section 4975 doesn't apply, non-ERISA church plans are subject to Code section 503, which contains similar prohibitions. Fiduciary standards in state trust law also apply, since there is no ERISA pre-emption.

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