Investment Advice for Free 55 and older - discriminatory?

[Benefits to all]

If a plan is offering a service through a service provider that provides investment advice for a fee as allowed by ERISA section 408(b)(14) (as introduced by PPA to not make it a prohibited transaction), and the investment advice is offered for free to those participants over age 55, is it potentially discriminatory? The thrust of the question: is investment advice considered a "other right or feature" under 1.401(a)(4)-4(e)(3)?

There appears to be little guidance on the issue. If anyone has a thought or direction to point, please share.

[Belgarath]

Yes, I think it is potentially discriminatory. Given that age is generally disregarded when testing availability of optional forms of benefit under 1.401(a)(4)-4(b)(2)(ii), and given that this dispensation is NOT specified in 1.401(a)(4)-4(e)(3) for "other rights and features" I think that there is potential discrimination, so you'd have to test it.

[Benefits to all]

Thanks Belgarath. Just to be clear, you are saying that the investment advice is a "other right or feature", correct? As in, not listed as an exception to definition of other right or feature under -4(e)(3)(ii)? I agree with you but wish I could find an IRS comment on the matter.

[GMK]

Some random thoughts. Are the fees for investment advise paid by plan assets? Do the participants age 40 through 54 have an age discrimination claim? Don't younger folks need investment advice as much as mature people do? Are any HCE's under age 55?

[Benefits to all]

The service provider charges fees (not paid by plan assets) for certain investment advice programs. The fees are waived for participants 55 years or older so that they can get the investment advice anytime. I do not think the age discrimination claim applies (but am hardly an expert in such claims). There are HCEs under 55, and it may help testing. But the question still remains: is the investment advice program (optional to use) a right or feature of the Plan?

[Belgarath]

Yes, I am saying it is an "other right or feature."