Final 415 Regulations

[Guest Astro]

Does anyone who is familiar with expense credits have an opinion on whether Treas. Reg. §1.415©-1(b)(4) applies to them?

Just to be clear, when I say expense credits, I am talking about a plan transferring the assets of a plan to another vendor (nothing about the plan changes but a new vendor will manage the assets). There may be a rear-end load to cover sales charges and other contract expenses. To help minimize this, many vendors offer an expense credit. The employer does not make any addition to the plan to make up for this.

Treas. Reg. §1.415©-1(b)(4) reads:

(4) Transactions with plan. The Commissioner may in an appropriate case, considering all of the facts and circumstances, treat transactions between the plan and the employer, transactions between the plan and the employee, or certain allocations to participants’ accounts as giving rise to annual additions. Further, where an employee or employer transfers assets to a plan in exchange for consideration that is less than the fair market value of the assets transferred to the plan, there is an annual addition in the amount of the difference between the value of the assets transferred and the consideration. A transaction described in this paragraph (b)(4) may constitute a prohibited transaction with the meaning of section 4975©(1).

Please note: All references are to the regs under 415 c which were turned into copyright symbols. Not sure how to stop that :angry:

[BG5150]

All references are to the regs under 415 c which were turned into copyright symbols. Not sure how to stop that :angry:

You can put a space before or after the "c"

No space: ©

Space in front: ( c)

Space after: (c )