hold harmless agreement

[Guest Ed Crosby]

The school district were I am employed has a third party administrator who has rejected my Vanguard 403b application to be my custodian because of a no hold harmless agreement. Does anyone know if I could have a hold harmless agreement drafted by an attorney and signed by me to meet this requirement? It would appear to me that either Vanguard or the school district would have to sign such a document. I hope to get some feed back before I discuss this with the school administrators in order have a plan in case the administrators reject my second request.

Thanks

Ed

[Carol V. Calhoun]

Barring contrary provisions of applicable state or local law, a school district can normally select which custodians to allow based on any criteria it chooses, and could elect only to allow those that will sign a hold harmless agreement. This is because technically, it is the employer, not the employee, who contributes to the plan. And as a practical matter, the school district may be much more willing to accept a hold harmless agreement from a custodian (which presumably has the assets available to pay if the IRS assesses employment taxes against the school district based on incorrect calculation of permissible contributions) than from an employee (who may not, and against whom it may be uneconomic to proceed legally in any event).

[Guest gmann]

If you must sell Vanguard, and Vanguard refuses to sign the agreement, see if your company (broker/dealer?) will sign the agreement. Sometimes a school district will accept an HHA from another big pocket.

Also, if you can sell other products, see which products have been pre-approved, and maybe you could sell those.

I feel your frustration. These school districts are a treat. They draft these agreements wherein you have to indemnify them for THEIR mistakes (CA and TX used to be the worst), and somehow they look at you with a straight face and say that is fair. Good Luck!