A bank which sponsors a defined benefit plan is contemplating the following 2 actions:

1. Replacing the existing trustee (a non-related financial institution) with the bank's own trust department.

2. Retaining an investment advisory company to serve as the plan's investment manager. The investment advisory company is owned 100% by an individual who is (a) the bank's president, (b) a member of the plan's administrative committee, and © a shareholder of the bank.

Are either or both of these prohibited transactions?

I would say that no. is not a prohibited transaction. Ihave several Bank clients that trustee there own plan. I will say that none of them charge the plan directly fot Trustee Fees. Two of these plans have had DOL audits in the last 18 months and no comments were made by the DOL.

On number two I would say yes if the Trustee pays any fees with Plan assets.