Payment of Professional Fees
Special Fund assets may be disbursed only for purposes expressly authorized under Minnesota law. Authorized Special Fund disbursements include service pension, disability, and survivor benefit payments and certain authorized administrative expenses. A common compliance issue that occurs with Special Fund disbursements relates to professional fees.
The professional expenses that a relief association may pay from the Special Fund are limited to “necessary, reasonable and direct expenses of maintaining, protecting and administering the special fund.” Authorized professional expenses that may be paid are limited to “audit, actuarial, medical, legal, and investment and performance evaluation expenses.” Authorized legal fees, for example, are reasonable fees paid directly to a licensed attorney or a law firm for work necessary to the Special Fund.
Published last in the February 2015 Pension Newsletter