What are administrative costs?
Administrative costs generally include the amount of money that an account owner must pay for maintenance and funds management. In most cases, these costs fall in three general categories: (1) the processing of information related to income and the amount invested; (2) actual funds management; and (3) determining eligibility for benefits and the payment of those benefits. The relative size of each component will vary according to how the plan is structured. • Information processing is essentially data processing. Salary and contribution information is sent from an employer to a location to be added to the individual’s file. Although a database of over 140 million individual Social Security accounts would be far larger than any existing retirement plan, it would still be much smaller than the databases of the three largest existing credit bureaus that maintain an average of 190 million individual accounts. • Funds management includes the actual selection, purchase, and sale of assets an
Those are the fees charges by the pool to oversee the Pool programs to reimburse the vendors such as Marsh, CIGNA and Sedgwick for the services they provide to the pool. Often the administrative cost is the dollars it costs the Pool to do business above and beyond the cost of the reimbursement of claims and the stop loss charges.
