Distribution Fees

[Guest stevena1]

Can anyone tell me where I could find industry standards report for TPA fees?

We had a DOL person tell us our distribution fees ($80) are "exhorbitant". Would like to study.

thanks

[Belgarath]

I believe it is a no-no for us (TPA's) to discuss specific fees. I'll go out on a limb somewhat, and say that based upon what I have seen and heard (so this is rather unscientific) that the fee you mention is pretty high.

I'm not familiar with any source document/report/survey that gives the information you are looking for, but there's probably something somewhere!

[RCK]

Is it an issue because the fees are passed through to the participant?

[Guest ronald mexico]

then we are also exhorbitant

[SMB]

First, let me caveat my response with the fact that I deal exclusively with "micro" plans (i.e., read maximum hand-holding).

I typically charge from $75-$100 per distribution, which includes:

Sending the terminated participant a "distribution packet" containing information rearding his/her Plan's specific distribution options, the required IRS notice, and election/rollover/spousal consent (where req'd) forms.

On receipt of the completed forms from the participant, preparing a "letter of instructions and authorization" to the investment custodian, mail same to the client to be signed and and forwarded to the investment custodian by the Trustee.

Processing the mandatory withholding deposits on cash distributions.

Preparing and mailing the Form 1099-R.

Preparing the Form 945.

My fees are also typically billed to the Employer - most of whom are more than "happy" to have all of this handled relatively "independently".

[Guest stevena1]

oops...sorry....

I didnt mean to break the board rules there.

But yes, we do charge to the participant...unless the employer asks us to charge to them (some do)

I think we are going to hire Cheryl Morgan to do a fee schedule study for our office anyway (as she discussed at ASPPA) so that should give us some insight. Thats kind of what I was looking for.

We have in our office calculated how much it costs US in labor to do distributions, and it is higher than what we charge. We also do all the hand-holding, as above poster described.

thanks for the input