How to record Plan Net Credits on Form 5500SF

Several of our plans use the Empower platform and receive plan net credits.    Empower reports this as negative fees.     On the Form 5500-SF is it correct to report this as a negative expense under Administrative service providers?

I have plans with Empower and AF with net credit accounts but I've not seen them reported as negative fees.  I have them allocated as earnings  or used for plan expenses every year and we show them as earnings on the 5500. 

If a plan has a surplus or reserve in such a plan-expenses account, is it the plan's asset?

5 hours ago, Peter Gulia said:

If a plan has a surplus or reserve in such a plan-expenses account, is it the plan's asset?

We count it as such. But it's supposed to be zeroed out each year, like the forfeiture account.  

Does a need to zero-out a plan-expenses account result from external law, such as ERISA or the Internal Revenue Code; or is it a term of the plan's agreement with the recordkeeper or other service provider?

1 hour ago, Peter Gulia said:

Does a need to zero-out a plan-expenses account result from external law, such as ERISA or the Internal Revenue Code; or is it a term of the plan's agreement with the recordkeeper or other service provider?

I'll take a stab at it, and I could be wrong...

If its a plan expense account, it is a plan asset because it is for the benefit of that plan rather than revenue sharing deposited into a service providers operating account.  As a plan asset, it is  subject to the qualification requirement that all funds are allocated  to participants based on definite plan formula.  This requirement then means that funds cannot carryover unallocated from year to year (same reasoning as the plan forfeitures).  So it goes back to the Code.

RatherBeGolfing, thank you for guiding us.

Revenue Ruling 80-155 restates Revenue Rulings 70-125 and 71-27 and (again) recognizes “allowing interim valuations in addition to an annual valuation[.]”  Rev. Rul. 80-155, 1980-1 C.B. 84, 1980-24 I.R.B. 11 [CCH Pension Plan Guide Pre-1986 IRS Revenue Rulings ¶ 19,530].

All those rulings interpret 26 C.F.R. § 1.401-1(b)(1)(ii).  https://www.ecfr.gov/cgi-bin/text-idx?SID=a5ac655b7ae110a969c04307a5e2bf7e&mc=true&node=se26.6.1_1401_61&rgn=div8.

The 1970 ruling suggests that investments ought to be valued at “fair market value on the inventory date[.]”  Rev. Rul. 70-125, 1970-1 C.B. 87 [CCH Pension Plan Guide Pre-1986 IRS Revenue Rulings ¶ 18,801].

None of the three rulings, including the 1970 and 1971 superseded rulings, mentions generally accepting accounting principles or fiduciary accounting principles.

While doing no less than yearly valuations and allocations, may a tax-qualified plan’s governing document allocate the trust’s net assets after setting a reasonable accounting reserve for plan-administration expenses?

If not, may the trust at least account for payables on expenses incurred and recorded by the inventory date?

If a plan must zero-out the unspent plan-expenses account (whether because the plan must not allow any reserve, or because the unspent amount exceeds a reasonable reserve), what fiduciary decision should an administrator make if the plan’s incremental expense for performing the allocation would exceed the amount to be allocated?

I suppose my questions are motivated by recognizing a practical point:  For a plan that for everything else has participant-directed investments and daily allocations, often measured by investment funds’ share accounting, it’s jarring to have a yearly allocation, by a plan-specified formula, of what remains unspent from a plan-expenses account.