Davis Bacon and plan expenses

[John Feldt ERPA CPC QPA]

An employer wants to have the plan assets pay for a portion of the TPA's plan administration costs (about 40% of it).

Any problem with paying this from the plan as an asset management fee (a small percentage of the assets, 0.03% or 0.0003) across all plan assets, including Davis Bacon (prevailing wage contract) accounts?

[J2D2]

An employer wants to have the plan assets pay for a portion of the TPA's plan administration costs (about 40% of it).

Any problem with paying this from the plan as an asset management fee (a small percentage of the assets, 0.03% or 0.0003) across all plan assets, including Davis Bacon (prevailing wage contract) accounts?

I'm also interested in this one. Any thoughts out there?

[PensionPro]

Yes, TPA fees can be paid from plan assets including from prevailing wage money. Only caution is prevailing wage funds should not be used to pay plan administrator/trustee fees/compensation for administrative expenses in providing fringe benefits if the PA/trustee are owners/officers .

[J2D2]

Yes, TPA fees can be paid from plan assets including from prevailing wage money. Only caution is prevailing wage funds should not be used to pay plan administrator/trustee fees/compensation for administrative expenses in providing fringe benefits if the PA/trustee are owners/officers .

Thanks, PensionPro. Am I correct in interpreting your caution to apply to self-administered/self-trusteed situations?

[PensionPro]

Situations where the owners/key employees are compensated from PW plan assets for services performed in various other capacities. This kind of scenario is going to be rare, but it happens. One owner we worked with insisted he should be paid reasonable compensation from plan assets for wearing the trustee hat. Since the original post refers to a TPA, I assumed it is not a self-administered plan.