12/10/04
Employers who sponsor qualified retirement plans have often expressed frustration that they could not charge a participant directly for the fees involved in processing a distribution or a Qualified Domestic Relations Order (QDRO) related to a participant's divorce. In addition, many plan sponsors are concerned about the ongoing administrative cost related to maintaining plan accounts for terminated participants. There is now welcome news on these issues.

The Internal Revenue Service (IRS) and Department of Labor (DOL) have both agreed that certain fees can be charged directly to individual participant accounts. These include fees for distributions following termination, in-service distributions and QDRO's. Plan sponsors may also charge terminated participants for administration costs without charging participants who are still active employees.

At the bottom of this page is the Summary of Material Modifications (SMM) and Appendix to be used to update your Summary Plan Description (SPD) to reflect the recent IRS and DOL guidelines. Please sign and date two copies where indicated on the SMM and provide a copy of this and the Appendix to every participant, including terminated participants, in your plan. Please return the other signed and dated SMM to Trendcepts. We will continue to invoice for these services the same as in the past, but, starting in 2005, the fees outlined in the Appendix will be charged against an individual's account rather than the plan as a whole.

If you have any questions or concerns regarding the above, please contact our office or click on the links below:

Summary of Material Modifications (SMM)

Appendix