Special Processing Fees for Self-Directed Retirement Accounts: When and Why They Occur
Published on August 1, 2016
As part of our transaction process, we conduct an administrative review. This review may also alert us to potential prohibited transactions that could have an adverse effect on the tax-advantaged status of your account. Our office prides ourselves on superior customer service so we are more than glad to assist clients in answering questions on our forms, and educate associated people involved in the transaction on compliance review. However, there are certain situations in our account and asset review process that may trigger special processing fees.
These fees arise when the review being performed is outside the normal scope of account administration and transaction review, and special services must be rendered in order to properly execute the transaction.
Our Fee Schedule defines special services as research or special handling of a transaction. In these instances, we must conduct specific research to determine if the asset is feasible for us to hold or not. Special processing may also occur if we must do an unusual review, or one outside our usual scope, to an existing asset within an account. This occurs for a variety of reasons which include but are not limited to these most common examples:
- The established details of an asset purchase agreement have not been met or followed, so further review is required.
- Information has been received confirming that a prohibited transaction has taken place and we must begin to distribute the account within 14 days (according to IRC 4975).
- The client has been unresponsive to requests for information, documentation, and/or past due balances.
- Receipt of a request for substantial account research, which can include copies of a closed account file, information about a sold asset, check copies, etc.
- Requested statement from a staff member on letterhead.
In the event a transaction triggers a special processing fee, clients are notified prior to the fee being assessed as a courtesy. The minimum fee is $150 which covers up to an hour of time for our staff to fulfill the research and review requirements; additional time is billed at $150/hour.
That said, we are happy to report that the majority of our clients have not been assessed this special processing fee. Thanks to the wealth of information about self-directed IRAs available on our website and elsewhere, many of our clients are well-educated about the types of assets they can (or cannot) include in their plans and they are proactive about the alternative assets held by their IRA.
As always, everyone at Next Generation Trust Services is happy to assist clients by answering questions about our forms and discuss compliance issues regarding the nontraditional investments allowed in self-directed retirement plans. Don’t hesitate to contact us at Info@NextGenerationTrust.com or 888.857.8058.