Are 401k Plan Fees Deductible?

[Guest BeaconBen]

My client is currently having the plan participants pay all the Admin fees through an additional "wrap" or asset-based fee calculated by the insurance provider.

Is there any benefit to the plan sponsor if the vendor bills the recordkeeping fees directly to the company (and eliminates the "wrap" charge that participants are paying)? They are an S Corp.

Are these recordkeeping fees deductible?

[stephen]

The advantage would be the additional benefit (via earnings in their accounts) to the participants by the company paying the fees.

I am unclear how a deduction for paying the fees would benefit an S-Corporation that does not pay taxes.