reimbursing fees for switching to new investments

[AlbanyConsultant]

I've got a 403(b) plan that wants to leave the current fund platform, but there is a decent back-end charge that would hit the accounts. The plan sponsor would like to cover the fee, but the fund company will not bill the plan sponsor; they will only debit the accounts.

Is there any legal mechanism for the plan sponsor to 'reimburse' each account for the amount that was taken as fees? This is a plan with no HCEs, so there's not a nondiscrimination problem to worry about...

[Kevin C]

With no HCE's, a new comp PS allocation of the desired amounts should work unless the allocations make some of them hit the 415 limit. If they hit 415, you might be able to spread the amounts over two years of PS contributions. You don't say if the 403(b) is ERISA covered. Adding an employer contribution would make it subject to ERISA if it isn't currently covered and isn't a church plan.

[QDROphile]

But what about participants who are former employees?