Charging expenses to terminated participants' accounts

[Guest terric]

Is it allowed to charge expenses to just terminated participants' accounts if the plan assets are in a pooled account?

If you are charging expenses by calculating pro-rata what the expense should be to a terminated participant's account, is there a limit on the dollar amount that could be charged?

Do you have to inform the participants how much will be charged each year?

Do you have to amend the plan either way (if you want to charge fees or not)?

Thank you for any help!

[WDIK]

This prior discussion should help.

http://benefitslink.com/boards/index.php?showtopic=31108

[E as in ERISA]

If you charge them, you have to make sure that they are only paying their share. They can't be allocated a directed charge for their full share and then have the remainder allocated to everyone (including them) in an indirect charge. Then they'd be paying more than their share. The limit on the total is that it must be "reasonable." So you'd want to be sure its not way more than industry standards I guess. You need to inform them in advance that they'll be charged something. Then after you charge it you probably want the reports to clarify how much was charged. Depends on the plan. ERISA 404c has extra requirements re disclosure of expenses so if they're that type of plan then you have specific requirements. The plan isn't always clear about who is going to pay the expenses. Lots leave it open so either plan or sponsor can pay. So no violation if the wrong one pays. Make sure what you're doing doesn't violate current plan terms. Then consider leaving plan open. But being clear in SPD. Which is easier to update.