Payment of Audit and Consulting Fees

[Guest IRISH79]

Can annual plan audit and consulting fees be passed on and deducted from participants accounts?

[J Simmons]

Annual plan audit fees? Yes, if the IRS and DoL rulings on the topic of fees being paid out of plan assets have been observed.

Consulting fees? Same answer except to the extent that such fees might be for settlor-type services (e.g., plan design, whether to continue the plan, etc.)

In individual account plans like a 401k, this can create a logistical challenge if the fees cannot merely be taken out of a required employer contribution before allocated to the individual accounts. If it must be taken out of the individual accounts, you must liquidate a part of each account's investments, and then transfer the funds out of that account. If you have many accounts, this could be overly burdensome.