Guest TJGfromOhio Posted February 2, 2011 Posted February 2, 2011 Does anyone have any thoughts about whether a multiemployer plan can issue/sell bonds through a financial institution? I see all kinds of ERISA issues (fiduciary obligations, prohibited transactions, misuse of plan assets, etc.) but the trustees won't let it go (primarily because other entities, like schools, issue bonds). Is anyone aware of a particular case, advisory opinion, rule, or regulation addressing the legal issues relating to issuing debt instruments and giving non-participants a secured priority interest over plan participants? Any input anyone could provide would be most appreciated!
david rigby Posted February 2, 2011 Posted February 2, 2011 I can think of a few crazier ideas, but not many! I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Peter Gulia Posted February 3, 2011 Posted February 3, 2011 The concerns about keeping clear of prohibited transactions and of disclosing that the plan trustees must not allow obligations to bondholders to impair their undivided loyalty to the plan seem much smaller than wondering who would invest in the bonds of an issuer that lacks sufficient power to increase the issuer's revenues. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
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