directed trustee and separate trust agreement

[K2retire]

We have a large client who would like to name their recordkeeper as directed trustee of their 401(k) plan. The adoption agreement is an FT William prototype. The recordkeeper is saying that they will only agree to be trustee if the employer uses a separate trust agreement, but they don't want to use the FT William separate trust agreement. They have their own that does not appear to be anything generated on the Relius document software that we know they use for their bundled clients. The question has been raised as to whether the client would be able to rely on the FT William IRS approval letter if they are using an unrelated separate trust agreement. The recordkeeper will only say that they can't give legal advice, but that is the only way they will agree to do it and other clients have had no problems with it.

Is this really an issue, or is someone making mountains out of mole hills?

[ETA Consulting LLC]

The question has been raised as to whether the client would be able to rely on the FT William IRS approval letter if they are using an unrelated separate trust agreement.

All they would need to do is submit the FT William prototype and their Trust Agreement to the IRS for favorable opinion. It's really an easy process, but the two must be approved for use together.

Good Luck!

[K2retire]

They won't want to spend the money to do that. But if we persuade them to do it, how long would that likely take?

[Stevo-PDX]

The question has been raised as to whether the client would be able to rely on the FT William IRS approval letter if they are using an unrelated separate trust agreement.

All they would need to do is submit the FT William prototype and their Trust Agreement to the IRS for favorable opinion. It's really an easy process, but the two must be approved for use together.

Good Luck!

The unrelated separate Trust Agreements are periodically modified, does this require a resubmission to the IRS for each modification?