Charging fees to terminees

[k man]

for anyone familiar with relius record keeping can you tell me if there is a method for charging terminees the participant fee for keeping their accounts in the plan? the record keeping people in my office are telling me they dont know of an a method for doing this, however, i find that hard to believe in light of the fact that the law allows you to do this.

[QDROphile]

Would it help to understand that the law allows fees to be charged to all accounts and the employer covers the charge for employees? The law does not allow fees to be charged only to participants who are not employees.

[k man]

Would it help to understand that the law allows fees to be charged to all accounts and the employer covers the charge for employees? The law does not allow fees to be charged only to participants who are not employees.

i understand that. the employer will pay the fees for actives, but terminees are expected to pay out of their accounts. this is permissable.

[Guest mjb]

There is an IRS ruling that allows admin fees to be charged to terminated participants accounts but not to active particpants.

[Lori Friedman]

I believe mjb is referring to Rev. Rul. 2004-10.

[k man]

there is a ruling. it is even in the corbel documents. the spd has a fee disclosure section and this is one of the choices. i am not asking if it is legal. i know it is. i am wondering if anyone knows how to make it happen on the relius system.

[E as in ERISA]

I'll start by saying I don't know Relius at all. But is it possible that you have to do an allocation of the expense to all participants first -- and then do an allocation of contributions to active participants only to cover their share? I understand that isn't what most want to do -- especially if the employer has historically paid the service provider outside the plan and/or doesn't want the participants to be upset seeing the fee allocation. But there is risk in doing an allocation that shows up only on the terminees accounts. As the others note, the allocation should only be their share of the expenses; they can't be paying for anyone else's share. And one of the ways to make sure that is the result is to do the allocation across the entire plan and then have it offset by a contribution in the actives accounts. From what I've seen, the ones that are just trying to charge a flat fee to terminees accounts often don't have good support or documentation for the fact that the employer is paying a like amount for the actives. That is not a good result.

[QDROphile]

My suggestion was to apply the fee to all acounts and "uncharge" the accounts of the employees to reflect that those fees are paid by the employer. I guess that does not work and I should have kept mum because I did not associate the suggestion with how Relius actually works.

[Archimage]

I have two suggestions:

1. Put your terminees in one division and post a fee transaction just to this division.

2. You must have the fee module for this one. You can code a fee amount to the terminated categories as an admin fee.

[Guest Rachael L.]

I have two suggestions:

1. Put your terminees in one division and post a fee transaction just to this division.

2. You must have the fee module for this one. You can code a fee amount to the terminated categories as an admin fee.

This works well, unless you are using Step-Rate for the Asset fees. If a client is setup with Step-Rate, and the client is only willing to pay (out of pocket) for actives, you will need to run fees twice. Assets will need to be run separately and then go into plan specs and change the fee schedule over to a termed schedule and apply it to only the terminiated division. You will then need to run the Calculate Fee job again, for the Admin/Participant fees.

It's a pain in the butt, but currently Relius is undecided as to whether it is legal to only charge Terminated participants. I've lost track of the amount of times I've argued with them regarding this...hopefully one day this will be fixed!

[BG5150]

I find that the Relius helpdesk is pretty good, either over the phone or via e-mail. you have to ahve an account set up with them.

The phone # for Administration is: 800-326-7235 x-1785

The wesite is: www.relius.net/support