Trustees attending the 65th Annual Employee Benefits Conference in San Diego later this month have a lot to keep track of—all the important sessions you’ve selected, networking with other trustees and fund professionals, getting answers to your burning questions, and keeping detailed records of every meal and expense. Wait, what?
While keeping track of your receipts for meals and other expenses might be the last thing on your mind, it’s important to be knowledgeable about Department of Labor (DOL) regulations surrounding trustee expenses to help keep your fund in compliance.
In their article “Trustee Expenses Revisited” in the August issue of Benefits Magazine, David P. Dorsey and Travis J. Ketterman, GBA, provide the latest information on DOL regulations for trustee expenses. Dorsey is a CPA and audit partner at WithumSmith+Brown, PC, in Bethesda, Maryland, and Ketterman is a partner with the Chicago, Illinois law firm McGann Ketterman & Rioux Ltd.
The first place to look for guidance on which of your expenses can be reimbursed should be your fund’s expense and education policy. This policy should address items like reimbursement for meals, personal expenses and transportation.
The article has a detailed discussion of each area. Here are some of the highlights:
Meals and Alcohol
- You can be reimbursed by the plan for the reasonable cost of meals that are necessary while traveling on fund business. DOL has not specified a clear upper limit, but be aware that DOL will scrutinize expense reimbursements for what it calls “lavish” meal expenses.
- DOL now wants to see both the credit card receipt and the itemized bill detailing what was ordered. You cannot be reimbursed for meals for spouses or for trustees of other plans.
- You can’t be reimbursed for meals if meals are already provided and paid for as part of an educational conference registration fee. Exceptions can be made for dietary, religious or other reasons properly documented and in compliance with the fund’s written policy.
- DOL will not allow bar tabs that are not associated with a meal. While some DOL investigators will not allow any alcoholic beverages, even with meals, many plans have a written policy permitting one reasonably priced alcoholic beverage at a meal, and DOL has often tolerated this expense. Because of the uncertainty surrounding alcoholic beverages, many plan sponsors (e.g., the union or the employer association) pay for alcohol separately.
- You may not be reimbursed for any personal expenses, which are defined as expenses that you could incur if you were at home and that are not required to conduct the business of the plan.
- DOL will often challenge first-class airfare. If a plan’s written expense policy allows first-class airfare in certain circumstances, be sure to document those circumstances. Examples include a medical condition or physical limitation of a trustee. Some plans have instituted flight time as a factor in the permissibility of upgraded air travel, although there is no certainty that DOL will always permit this expense.
- Your documentation should prove that the ticket submitted for reimbursement was indeed used for travel, as opposed to an itinerary showing that a ticket was purchased for a higher class of travel that could ultimately have been exchanged for a ticket at a lower class of service while the traveler kept the difference.
[Related Reading: Advice for Making the Most of the Annual Conference]
Documenting Your Trustee Expenses
The Internal Revenue Service (IRS) does not require receipts for expenses under $75, but DOL wants documentation of all expenses. Recognizing that receipts may not exist for some small expenses (such as tips), most plans require a receipt for expenses of $25 and over, while others require receipts for all goods and services wherever receipts are normally provided or a contemporaneous note when a receipt is not available.
Here are the requirements for a properly documented expense:
- Nature of the expense (e.g., travel, meal)
- Date of the expense
- Amount of the expense
- Where the expense was incurred
- Who was in attendance, including the name and title of all attendees
- Why the expense was incurred (e.g., education)
- Credit card receipt and, for a meal, itemized receipts showing the items ordered, including prices for each.
Learn More About Trustee Expenses
By following these guidelines, you can enjoy your many duties at the Annual Conference and other educational pursuits, get reimbursed for allowable expenses and help your fund stay in compliance. International Foundation members can read the full article: “Trustee Expenses Revisited” in the August issue of Benefits Magazine.
Kathy Bergstrom, CEBS
Senior Editor, Publications, at the International Foundation
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