Payment of plan expenses

Employer sponsors more than one plan.  Each plan has a plan expense account (excess revenue account held within the trust). 

Question - Can the plan expense account from Plan A be used to offset reasonable administrative expenses for Plan B?

Any guidance would be greatly appreciated!  Happy Friday! :)

Consider IRC Section 401(a)(2) and ERISA Section 404 and you will probably find your answer.

Thanks, jpod.  I read IRC Section 401(a)(2) and ERISA Section 404.  The exclusive benefit rule applies. 

Jpod, just so I'm clear. This account is not the forfeiture account.  It is the plan expense account resulting from excess revenue and it is held within the plan's trust. 

Does that change your answer?

I hate to complicate the matter, but I think the answer is "it depends."  An ERISA expense account held within the plan can only be used for the reasonable plan expenses for that plan.  However, a few years ago, the DOL issued some guidance that indicated it was OK to hold an ERISA budget account OUTSIDE of the plan assets.  That is, in essence, that the service provider is providing a credit to the plan sponsor for it's use to offset plan expenses out of the service providers own pocket (with funds derived from the fees it charges, or revenue sharing it receives for that plan).  Now, I disagree with the DOL on this one - because frankly, if the money the service provider is using to pay plan expenses came to the service provider either "directly or indirectly" from/through the placement of plan assets, then I think those funds are/should be plan assets as well.  But I digress - because the DOL said the opposite.  To that extent, if the ERISA bucket is NOT a plan asset, then I suppose, theoretically, they can be used by the plan sponsor for a different plan's expenses.

The service provider I work for does have ERISA accounts that are NOT plan assets - but we do, by contract, restrict their use only to paying expenses of the plan that generated those funds - but....

If, as the OP said, each expense account is "held within the trust," then don't we know the answer?  You can't use Plan A's assets to pay Plan B's expenses.

2 minutes ago, jpod said:

If, as the OP said, each expense account is "held within the trust," then don't we know the answer?  You can't use Plan A's assets to pay Plan B's expenses.

*IF* that is in fact the case, then yes, we know the answer.  But I can assure you that most people (clients and even my co-workers) don't know the difference....

Thank you for the feedback.  I appreciate it.