Archimage Posted March 25, 2005 Posted March 25, 2005 I know the answer to this but I am hoping there might be something out there I am missing. I just found out that the broker for a plan is the spouse of the owner of the company sponsoring the plan. The broker is receiving commissions for the plan. As far as I know this is a prohibited transaction. Is there anything I am missing here? Any PTEs I am not aware of?
JAY21 Posted March 25, 2005 Posted March 25, 2005 It does appear to be prohibited transaction since a "spouse" of a direct or indirect owner of 50% of the employer is a "party-in-interest" (disqualified person). To my knowledge there is no PT exemption for this relationship/transaction.
Guest dbvail Posted March 25, 2005 Posted March 25, 2005 What were they thinking? My experience is that they, if discovered, will be required to return the commissions to the plan, even if such were paid by the insurer etc. Whether the owner is allowed to continue as Trustee (if she does so now) is arguable. Good luck.
Guest curmudgeon Posted April 1, 2005 Posted April 1, 2005 I had this happen also, but it was the son that was the broker. He worked in a big AGE office so he made an arrangement to title broker of record with an associate but still pulled the strings.
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