Processing Fee for Loan

[Guest dott]

Can a plan sponsor charge a participant a "processing fee" for administering participant loans (submitting payments, etc.)? This same plan sponsor charges a "processing fee" for withholding child support payments and wage garnishment orders. If so, does it have to be within a specific guideline?

[QDROphile]

The plan sponsor cannot charge a participant or a participant's account with respect to a loan because the loan is from the plan. The plan can charge administrative expenses for a loan. Plan sponsor personnel can provide administrative services to the plan and the plan can pay the plan sponsor for the services if the conditions of the applicable prohibited transaction exemption are satisfied.