charging terminated participants

[Guest anne1]

If an employer wants to charge terminated employees for maintaining a balance in the plan, can the employer bill the ex employee? Or does the bill have to come from the plan? Can the employer keep the money that they receive for the bill or must it go into the plan?

[Guest Pensions in Paradise]

Ummm.... no, the employer cannot pocket fees charged to the participants.

However, terminated participants' accounts can be charged a pro-rata portion of any plan related administrative expenses. The plan and SPD must be amended to disclose the fees. And the fees must be paid directly to the service providers.