Segregated Accounts

[Guest MNR]

Can segregated accounts exist within and be part of a ps/401(k) plan?

[Alan Simpson]

If by segregated accounts you mean individually directed accounts, yes it is possible. However, I would consider the following:

1) Does the plan document and investment policy allow for

individual direction?

2) Will the Trustee of the plan be willing to be the signer on the

account and work with the investment advisor/broker? Since

the trustee is responsible for the plan and its assets they

should be the only signer on the account. The account could

be established with the Trustee as signer but giving the

individual participant written authority to direct the

investments in the account as long as the trustee is

comfortable with that setup.

3) Will the ability to have an individually directed account be

offered to all participants? If not then you may have a

problem. As long as the ability to self-direct is offered and

communicated, it does not matter if they take the opportunity

to direct the account.

4) How will fees for the individually directed account be paid?

5) Who will review the individually directed account and its

transactions to ensure that no prohibited transactions have

occurred?

[Guest MNR]

thanks. a little more detail: segregated accounts belong to owner and relatives. they are participants in the 401(k), not the p/s. but having separate accounts for themselves. Does this change anything?

[Lynn Campbell]

If the owners and their relatives have segregated accounts, all participants must have the same opportunity, and the Plan must permit segregated accounts.