I don\u2019t believe in coincidence and when something happens twice, it\u2019s a cause for concern. Within the past couple of months, I\u2019ve had to deal with third party administrators (TPAs) paying ERISA \u00a73(38) fiduciaries in excess of their contracted fee.<\/p>\n
Advisors who are fiduciaries need to understand that getting paid in excess of their fee isn\u2019t found money, it\u2019s money that needs to be turned over back to the plan. It\u2019s no time for a shopping spree because as a plan fiduciary, it\u2019s a prohibited transaction to take a fee in excess of the contracted amount and as a fiduciary, you can\u2019t use plan assets to to your benefit. Sure, the TPA messed up, but it\u2019s your job to turn the money over as soon as possible.<\/p>\n
As a fiduciary for a plan, I was paid double my fee one quarter and I held that excess in escrow until the TPA discovered the error. You need to watch those quarterly payments to see anything that\u2019s different from the norm.<\/p>\n
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