Deemed IRAs; Required Trustee

[Guest RSNOW]

The Rev. Proc. that included the IRS model "good-faith" language for deemed IRAs states the Trustee signing the amendment must be a Trustee authorized to be an IRA trustee. Does this means the trustee must be a bank or other financial institution that has received approval to be an IRA trustee ?? if true, and given most of our clients are small clients with self-trusteed plans, are deemed IRA likely to be attractive to these small clients ? Could they have a bank be the trustee for the deemed IRA account(s) and still self-trustee the other qualified plan accounts ? I'm just trying to see if the logistics and restrctions are worth the trouble for small clients. Thanks for any input.

[mbozek]

Yes if you can find a bank that wants only this business but I dont think the bank would want to administer such a small amount without acting as the trustee for the qualfied plan assets.

[Guest RSNOW]

Thanks mbozek.

[jstorch]

Beyond the trustee issues, I see a significant problem in the Rev. Proc.'s suggesting the extensive Listing of Required Modifications for traditional/Roth IRA must also be included. Why would a small employer subject themselves to all that?

Following is a link where I address the issue in more depth.

http://benefitslink.com/boards/index.php?s...t=0entry93487

Has anyone out there drafted a deemed IRA provision for a plan? If so, how did you address the 2003-13 LRM guidance?