TPA reluctant to provide information regarding ownership of ER stock

[katieinny]

Participants in this plan get ER stock under the ESOP part of the plan and they can also buy ER stock with their EE deferrals under the 401(k) part of the plan.

The employer is trying to make sure that there is enough cash on hand when employees terminate and want to cash in their stock. The employer asked the TPA to provide a list of participants holding stock so they could determine how many retirements or other terminations might be coming up so that they could make an educated guess about their liquidity needs. The TPA is reluctant to provide that information.

Apparently, the TPA is concerned about the 404c regs relating to confidentiality and the potential for undue employer influence on participants.

Is the employer not entitled to know which participants in the employer sponsored retirement plan own ER stock?

[stephen]

It seems to me that the employer is just trying to gather inofrmation about the employer stock in the plan so they can do an informal repurchase obligation study. I agree with you that this information should be provided to the employer. After all doesn't the employer have access to this information via a website or through the annual/quarterly reports anyway?

[WDIK]

Who are the named andministrator and trustees?

[katieinny]

The employer is named as the plan administrator and a bank is the trustee.

[WDIK]

Not being a lawyer, please take my response for what it's worth.

It seems to me that there are several reasons why the employer would be entitled to this information and no reason why it should be denied to them.

[QDROphile]

TPAs should do what they are told unless they are fiduciaries, breaking the law, or breaking the TPA contract aginst the TPA's will. Plain and simple. Whether or not access to the information is proper, the TPA should follow the instructions of the appropriate fiduciary. Violation section 404© is not breaking the law in this context.

N comment on what the fiduciary should be thinking about this.

[katieinny]

QDROphile -- my thoughts exactly. Getting that through to the TPA is the next hurdle.

[david rigby]

Hmmm. If the TPA "resists", I might be able to suggest a new TPA.

[stephen]

Me too.

[QDROphile]

You might tell the TPA that if it oversteps its role, it could be a fiduciary. ERISA says that if you exercise control, you are a fiduciary even if you are not a named fiduciary. Once you fall into a fiduciary role, you cannot be sure where your fiduciary status, or liability, ends.

[katieinny]

So the general concensus is that the TPA is taking the 404c confidentiality issue, and concern that the employer could bring undue influence on participants, out of context.

[QDROphile]

I did not say the the TPA's concerns were wrong or that it was wrong to express those concerns. But it is not the TPA's decison and the TPA should follow instructions of the fiduciary with authority over plan information, unless the TPA was hired for this sort of work and given discretion or authority (which would probably make the TPA a fiduciary).

[katieinny]

Yes, I understand what you're saying. Thanks.