Cost of late contribs--paid from plan?

Can the cost of calculating the interest for late contributions (and preparing the 5330) be charged against the plan?  i.e. taken from forfeitures?

What about the cost of calculating interest for missed deferral opportunity?

I know the interest itself must be paid by the ER.

IMHO? Yes - that's a normal plan administration function.

You are correct that the interest itself is a settlor expense, but so is the cost of calculating the interest (late contributions and missed deferral opportunity) and preparing the 5330. Not payable by plan assets.

Let's agree to disagree, of course assuming the fees are "reasonable." I would classify this (not the interest itself) under routine administration, rather than a Settlor expense. AO 2001-01A doesn't seem to prohibit this. Perhaps I'm a lone voice crying in the wilderness.  

The calculation of interest for DFVC filings is a settlor expense. How would this be different? 

You are probably right - I think I botched my initial thoughts. After my last post, I started thinking along these lines myself.

So then "No"?

BG5150:

In my experience dealing with the DOL, they would look at this through the following lens:  The ERISA fiduciary (Plan Administrator) "messed up" in this case--late contributions, etc... Plan participants should not have to "pay" for the fiduciary's mistake. In their view, this would not be a reasonable expense of plan administration. Others may have a different view, but this is mine. The answer is no.

The Labor department’s Voluntary Fiduciary Correction Program’s § 5 (General Rules for Acceptable Corrections) includes this:

“The fiduciary, plan sponsor[,] or other Plan Official, shall pay the costs of correction, which may not be paid from plan assets.” § 5(c)(1).

“[T]he plan may not pay any costs associated with recalculating participant account balances to take into account the new valuation. There would be no need for these additional calculations . . . if [the fiduciary had not breached its responsibility]. Therefore, the cost of recalculating the plan participants’ account balances is not a reasonable plan expense, but is part of the costs of correction.” § 5(c)(3).

“Any fees paid to such representative for services relating to the preparation and submission of the [VFC] application may not be paid from plan assets.” § 6(b).

https://www.govinfo.gov/content/pkg/FR-2006-04-19/pdf/06-3674.pdf

Even if no fiduciary uses the VFC Program, a fiduciary might, unless its lawyer advises differently, presume the Program’s conditions follow an Employee Benefits Security Administration general interpretation that a plan ought not to be burdened by an expense that would not have been incurred had a fiduciary not breached its responsibility to the plan.

Such an interpretation might be logically consistent with ERISA § 409(a): “Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this title [I] shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, . . . , and shall be subject to such other equitable or remedial relief as the court may deem appropriate[.]”

The circumstances and reasoning might be different if there was no fiduciary breach.