Not sure we have a trust; using a prototype document

[Guest TinaNewToPension]

I think we messed something up. We have a profit-sharing plan-Keogh (it is called a prototype and it has a base plan document, adoption agreement and SPD).

We have been amended for GUST and EGTRRA - but here's the question: We have the funds managed by one of the partners investment managers. They are not doing any record-keeping, etc. I found about the fidelity bond requirement - but I am more concerned about the trust requirement. We do not have a trust. We do have an account with the investment manager - where the money is held - is that good enough? I'm concerned about this. Any help would be greatly appreciated - you all seem to know so much!

[WDIK]

It is likely that your prototype document is a combined plan and trust document.

[Guest TinaNewToPension]

Thank you so much for responding. I took a look, the language is included in the documents - but do we need a formal trust created with its own EIN? I was looking at Schedule P of the Form 5500 and I am getting a little confused, etc. about what is needed to meet the trust requirement (2.b. where it asks for the Trust's EIN number). I know this probably sounds pretty basics, but I am new to the pension side of things. Thanks!

[E as in ERISA]

The language creates the trust. You can get a TIN pretty by filing an SS-4. The next questions are who is named as the trustee and is that person/persons involved in the fiduciary decisions? Are the assets held under the name of the trust? Whose EIN is associated with the account?

[Guest TinaNewToPension]

The trustee is the owner - and yes, she and the one other owner set-up the plan and are involved in fiduciary decisions involving the plan.

It took some digging with a lot of people asking me "why" I was asking these qustions, but here's what I found out. The accounts are held by the investment manager in what the owner calls a "Fidelity account" which she told me are similar to "Schwaab1 accounts". The accounts are held each participants name - so it appears the assets are held in the name of the participants (although they do not have access to the accounts) using the social security number of the participants.

The investment manager handling the money is not a designated investment manager, but rather is the owner's investment manager who helped her set-up the arrangement).

I think we have a problem! Please help!

[pmacduff]

The accounts should be titled in the name of the Plan FBO (For Benefit Of) the participant. For example: "Jane Doe Profit Sharing Plan FBO Jane Doe". I know many investment firms are reluctant to simply retitle the accounts and may require a transfer into a new account with the correct name. Hope this helps.

[Guest TinaNewToPension]

Thank you so much! That really does help and I will work on getting that changed. Other question though, once we file the SS-4 and get the TIN, should the accounts be assoicated with the new TIN and not the employee's SSI? I think that is what everyone is getting at, but I wanted to make sure I wasn't "reading" too much in to it.

[pmacduff]

I believe you want the account tied to the Trust TIN, (as long as the Participant Name is reference in the "FBO" of the title) not the participant SSN, to tie it to the Plan.

[E as in ERISA]

Since the accounts aren't properly titled right now, make sure that the individual participants aren't going to be getting tax reporting in their SSNs for 2003.