ERISA Budgets — Be Careful!

ERISA budgets are all the rage, allowing plan sponsors to use profits from their providers to pay for plan expenses, including their advisors. But attorney Adam Cantor of Wolff Samson cautions that plan sponsors need to be careful creating and overseeing the ERISA budget. Cantor offers 10 questions to think about, including:

• Which expenses qualify
• What records need to be requested from the provider
• Determining reasonableness of fees
• Indemnification for expenses later determined to be ineligible
• Handling forfeiture accounts
• Frequency of review
• Dealing with carry-over budgets

Though fairly simple and straightforward, issues about forfeiture accounts can be important — and even a way to engage prospects by asking them if they have considered these issues.

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