Resigning from case

[k man]

Our custodian holds assets for a plan in which we are TPA. We have decided to terminate the relationship. how do we transfer the assets of the plan if the plan sponsor will not take affirmative action and hire someone else?

[Guest SWH]

okay, just to clarify, you are the custodian and the TPA and you are terminating hte relationship with the client across the board -- as custodian and TPA?

Client has basically ignored you and won't get his monies out of your accounts to put them with another custodian?

Sounds icky. I would get with a lawyer. One who has experience with ERISA plans and investment companies.

Sorry. That's the best I got.

[JanetM]

Is there contract or trust language that deals withht this? Get some legal advice if there isn't.

You can't distribute the funds to participants, so unless you can transfer to another custodian then you are stuck. Get the DOL involved if this is 401K plan, what happened to contributions?

[Peter Gulia]

Even if the agreements have clear "get-out" provisions, that might not be useful by itself.

If the custodian is a directed trustee or otherwise has similar fiduciary duties, it can't deliver the assets until it knows that it is delivering the assets to (or as properly instructed by) a duly appointed trustee who or that is competent to serve and not known to be untrustworthy.

Often, that rules out most or all of the employer's executives and their subordinates. The facts that motivate a recordkeeper or tpa to get rid of a customer often also could be used to show that a directed trustee or custodian knew (or in the exercise of proper care would have known) that the employer and its people are untrustworthy.

In some circumstances, a fiduciary might use other procedures in an effort to protect plan assets.

[J Simmons]

One of the other procedures you might try would be applying with the DoL to be a "qualified termination administrator" for an abandoned plan, as there seems to be no responsible plan sponsor or plan administrator. See 29 CFR 2578.1. Maybe your situation doesn't fit squarely into place with those regs or their purpose, but giving advance notice to the plan sponsor of your intent and if necessary, copying the plan sponsor with your request to the DoL, might get the plan sponsor's attention--and action.