Billing Participants

[Guest Don J. Smith]

Is is legal for an Employer to bill terminated participants a $50 processing fee?

The employer is charged this from their TPA and would like to pass this cost onto the participants.

[Guest]

It's usually OK to bill participants accounts as long as its reasonable, for an appropriate purpose and . I don't think there would be any liability for the participant to pay out of pocket.

[Guest PAUL DUGAN]

At the last ASPA meeting there was a very good discusion regarding charging participants accounts. It started in regards to QDROS. They stated that a participant could not be charged directly for the expense of handling a QDRO because it was a mandated ERISA benefit. They than stated that you could not charge for Normal Retirement Benefits again because they are ERISA mandated benefits. This led to the question of termination benefits. The DOL rep indicated it would not be reasonable to charge a terminated participant unless it could be shown that it was more expensive to pay terminees than retires. If you could not prove this than the charge to terminees would not be considered reasonable