Trustee

[Guest moltengater]

Does the trustee of a qualified plan have to be a U.S. citizen? Could a non-U.S. citizen be the named Trustee on a qualified plan?

[Mike Preston]

Does the trustee of a qualified plan have to be a U.S. citizen? Could a non-U.S. citizen be the named Trustee on a qualified plan?

I can see no good reason for precluding a non-U.S. citizen from being the Trustee of a qualified plan.

However, and this is just conjecture on my part, just like the assets of a qualified plan must be, in certain respects, domiciled in the United States, I would think the same would hold true for a Trustee. That is, it is necessary for qualified plan assets to be subject to the jurisdiction of the US district courts, unless the regulations carve out an exception. Hence, investing in foreign assets is pretty much, but not completely, limited to those securities which are traded on a US based stock exchange. Mutual funds can be established for this purpose. At the far and of the spectrum a special class of investment known as an "ADR" (I think I've got that right, but I might be off a bit) can be established to give the US Courts some jurisdiction. In any event, this requirement is set forth in ERISA Section 404(b) and the regulations thereunder.

So my guess is that as long as the individual's actions are subject to being overseen by the US district Courts, I would think that person could be a Trustee.

As the appointment of a Trustee is, in and of itself, a fiduciary action, I would think appointing a Trustee whose actions are not subject to being overseen by the US courts is a dangerous fiduciary action to take.

I couldn't find, after a quick look however, any specific mention of the requirements for being a Trustee, though, so the above is just a guess.

[E as in ERISA]

That was what came to mind for me too: Jurisdiction. If the person couldn't be reached by a federal court, I wouldn't appoint them.

[movedon]

I have a very vague memory that there is a problem with a foreign trustee. Look at SBJPA and TRA '97. Sorry I can't be more specific.