Who decides whether plan expenses will be paid from plan assets?

The determination of whether plan expenses will be paid from plan assets is the responsibility of the fiduciaries of the plan. Fiduciaries are individuals or entities that have the authority and responsibility to manage the plan's assets and operate the plan in the best interests of its participants. They are guided by the principles set forth by the Employee Retirement Income Security Act (ERISA), which requires fiduciaries to act prudently and solely in the interest of the plan participants and beneficiaries.

The fiduciaries must ensure that any expenses paid from plan assets are reasonable and necessary for the administration of the plan. This includes management fees, administrative costs, and other expenses that directly benefit the plan. Their primary obligation is to act with the utmost care and loyalty, ensuring that decisions about expenses align with the interests of the participants.

While regulatory bodies like the Internal Revenue Service (IRS) and the Department of Labor (DOL) set guidelines and compliance standards for how plans operate, they do not directly decide on the payment of specific plan expenses. Similarly, employees or plan participants do not have the authority to make these determinations; their interests are represented through the fiduciaries' management of the plan.