Revenue Sharing and Charging Term'd Participants

[rlb64]

Plan's revenue sharing $ have been used to offset monthly admin fees paid by the employer. The admin fees are based on # of participants and total participant assets.

Client changed its mind and has decided to begin charging terminated employees the per participant and asset fee. They choose to only pay admin fees for the active employees. However, revenue sharing $ will continue to offset the employer's charges.

My concern with this arrangement is that the terminated participants will essentially pay inflated admin fees because their assets are being used to fund a portion of the active participant fees (via revenue sharing) and again used to fund the terminated participant admin fees. We are not crediting any portion of the revenue sharing $ back to the terminated participants.

Any problem with this?

[austin3515]

Subtle, but I think there is a problem. The terminated participants should get a fee reduction for the revenue sharing, the same way the employer does. Why should all the benefits of revenue sharing annure to the sponsor at the expense of plan participants (regardless of their status)?