blue Posted June 30, 2008 Posted June 30, 2008 Could anyone point me in the right direction regarding researching the following? Is there anything in ERISA which precludes a son (not actively employed by father's company) to perform the investment advisory duties of father's company 401(k) plan?
jpod Posted June 30, 2008 Posted June 30, 2008 Section 406(b)(1) of ERISA and Section 4975©(1)(E) of the Internal Revenue Code fo 1986.
JanetM Posted June 30, 2008 Posted June 30, 2008 Laymans terms - Not if the father/company, using proper due diligence as a fiducairy, show the son is the right one for the job, based on all the important stuff like cost, experience, objectiveness, etc. JanetM CPA, MBA
jpod Posted June 30, 2008 Posted June 30, 2008 JanetM: You may want to take a look at 29 CFR Section 2550.408b-2(e)(2) and Example (6) of -2(f) and see if that changes your mind. (Identical provisions are in the Treasury Regulations interpreting Section 4975©). QDRO: If there is no compensation, direct or indirect (as unlikely a scenario as that may seem), it could nonetheless be a PT (e.g., if the son can then "tout" his experience as an investment advisor to the XYZ Company Retirement Plan); or, perhaps not.
GBurns Posted June 30, 2008 Posted June 30, 2008 Isn't there a NASD or RIA rule that prohibits this ? George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction)
blue Posted July 1, 2008 Author Posted July 1, 2008 Yes the son would be compensated. Thanks for all the comments! You have given me a great starting point for researching.
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