Paying Expenses from Plan Assets

[waid10]

Employer has hired consultant to create a web-based retirement calculator to assist participants with calculating how much they should save to achieve a desired standard of living upon retirement. The consultant will charge a one-time set up fee and ongoing annual maintenance fees for this service. The calculator will provide information for both DB and DC plans for Employer.

Can the expenses related to this be paid from plan assets? If so, how allocate among the DB and DC plans?

Thanks.

[david rigby]

Just my opinion, but this does not sound like an expense related to plan administration. But I've been wrong before.

Perhaps the PA (and plan's ERISA counsel) can document the process(es) and uses of this webcalculator in sufficient detail to allocate a portion (less than 100%) to plan administration?

[GBurns]

What you describe should be readily available from the investment providers. It might even be available from the enrollment company.

I also think that it is available on many freely accessible sites. Try a Google search on "retirement calculator" or a refinement.

[Guest Sieve]

Here's another way to look at this.

It certainly is within fiduciary obligations/responsibilities to make certain that material provided to participants is appropriate and without glitches--in fact, I would say that this is a mandatory fiduciary obligation. I think an administrator should evaluate whether an additional cost should be incurred--and, if so, how much is reasonable--in order to protect the integrity of the information made available to particpants as part of their investment & retirement self-education. It keeps the participants from going hither & yon looking for information and calculators in the far reaches of the internet or using a software package purchased who-knows-when, and then not really knowing if the calcualtors even work right.

Granted, there is no obligation to provide participant education. But it is within fiduciary discretion to do so. Perhaps integrity of material and value with regard to education can be provided by the investment providers or elsewhere at no or little cost, but I think that's a call best left to the fiduciary and is within the fiduciary's discretion.

I see this as nothing more than the cost of educating participants, and that is an administrative expense and can be paid by the plan. If such a course of action is undertaken, then the fiduciary must make certain that the service is worthwhile, and reasonably priced for what is received.

(By the way, I will provide a citation for ERISA's definition of "glitch" upon request.)

[JanetM]

Isn't glitch defined as "goobered up"? Years back while in the USAF we had technical term for it - FUBAR.

[rcline46]

Typical USAF, new kids on the block. Correct term is SNAFU.

[Guest Sieve]

Janet -- What's the BAR stand for? If I knew, I've forgotten.

[david rigby]

... beyond all recognition....

[JanetM]

Typical GI....... still TU after 233 years

Beyond all repair

[Guest Sieve]

TU? (Sorry, I'm USN . . .)

[JanetM]

Not you Larry, am betting rcline was GI. SNAFU was army slang first. For all you swabbys out there, tango uniform or tits up as some say - slang for dead or destroyed.

[J Simmons]

I gotta say, I learn something new on the Board everyday. Today is no exception. I'm sure I'll keep learning something new here everyday until I go TU.

[Guest Sieve]

Leave it to the armed forces to have phrases as descriptive as Yiddish . . !!

[A Shot in the Dark]

Sieve:

Since you were a navy guy, I am surprised that you would not understand FUBAR.

Go Army.

For the football game to.

[GBurns]

I thought that there was a lack of communication between our intelligence agencies, now I see why it might even be worse with our armed forces.

[Guest Sieve]

You misunderstand, George. We're communicating. It's just that we apparently have different FUBARs and SNAFUs and probably other language difficulties. But communication? No problem.