Actuarial Fees Payable Out of Plan

[Andy the Actuary]

An over-funded not-for-profit plan will undergo a spinoff-termination to capture excess plan assets. The sponsor understands that only so much of the assets must be legally transferred to the spunoff plan (for actives). Suppose the sponsor wants to study transferring more than the minimum requirement. Since transferring more than minimum requirement can be construed as benefiting the participants, is it justifiable for the cost of this study to be paid by the plan rather than the plan sponsor?

[Kevin C]

A study to help the sponsor decide how much of the excess to transfer sounds like a settlor activity to me. The expenses to implement their decision sounds like administrative expenses.

You probably have already seen this, but the DOL has a good discussion of Settlor vs. Plan Expenses on their website.

http://www.dol.gov/ebsa/regs/AOs/settlor_guidance.html

[Andy the Actuary]

Thank you, Mr. C