A Fees paid in by the plan ?

[ESOP Guy]

We have a client that failed to file the 5500 timely.

They paid various legal expenses for the DOL submissions to correct the late filing.

They now want to run those fees through the plan.

I know great thing to do. You fail to do your job and now you make your employees pay for it.

But it isn't clear to us what type of expense this is.

Any help and reason why you think the way you do would be helpful.

Sorry, the question isn't fully clear.

We don't know if they can do that. Although so far the answer is looking like it is a "no".

If anyone has something real black/white on the subject let us know.

[My 2 cents]

Does the DOL allow the use of plan assets to pay for that sort of thing?

[david rigby]

Normal prep and filing expenses for the 5500 are probably plan expenses, rather than settlor expenses.

But, extra fees to fix an error (ie, a settlor error) might not be plan expenses.

After you review the advice on the DOL website, we would be interested in learning of your conclusion.

[DMcGovern]

I have an article from BenefitsLink that reviews a "new" DOL position on what are settlor fees vs administration fees. I think the article is from 2001. In the article, it specifically states that CAP, DOL and IRS sanctions or penalties, DOL delinquent filer program fees are considered settlor fees (among others). Also, a 2010 article from McKay Hochman also states that settlor expenses includes "fees associated with correcting a plan error; and fees for filing Form 5500 late."

It seems like using plan assets to pay for such expenses would be benefiting the employer, and violating the exclusive benefit rule?