trustee and plan sponsor disagree

[K2retire]

We are trying to reconcile conflicting instructions and not certain whose direction to follow. (My current employer's procedures often call for the plan trustee to act in situations where I would have expected the employer to act.)

The plan in question was originally established for company A, with the owner of the company as the sole trustee. Last year we received instruction from the trustee to restate the plan with Company B as the new sponsor. As we investigated the relationship between the two companies we learned the as part of a bankruptcy proceeding the ownership of company A was transferred to another individual. The trustee started company B and hired the majority of the employees that had worked for him at company A. The new owner has instructed us to terminate the plan.

Whose direction would you follow in this situation?

[Mike Preston]

Those of MY lawyer.

[david rigby]

Indeed.

Consider also that you may eventually follow instructions of both.

If B controls the existing plan, then A (probably) has no authority. In fact, A might not be the trustee any longer.

But A may wish to create a new plan for the new company.

Very often, there are more facts than first presented.

[TPAMan]

I would be surprised if the plan's trust provisions would extend the powers of plan restatement to the trustee(s).

[K2retire]

It appears that we have a solution. The owner of company A will sign a corporate resolution agreeing to allow company B to assume sponsorship of the plan.