Question: Trustee, naming of

[BG5150]

Can the Plan Sponsor name a position with the Employer as a Trustee, instead of specifically naming someone? For example: The Trustees shall be the President and CFO.

Secondly, does the Trustee have to agree, in writing, to be a Trustee?

I see a lot of plans where the husband owner is Trustee, and that his wife is also names as a Trustee. What if she doesn't even know that she is Trustee and something happens?

[GMK]

^ then he'll have a lot of 'splainin' to do.

The section of the Plan Document about the Trust should include clauses for adding and dropping trustees with a requirement that the changes must be in writing and (you would hope) with a requirement that an added trustee needs to provide her/his acceptance in writing.

[My 2 cents]

"I didn't know I was a trustee!" sounds like as good an excuse as Steve Martin's old excuse "I forgot" (as in "I forgot that robbing banks was against the law").

How could a trust document be considered valid if it is not signed by everyone who was to be a trustee?

Or are we talking about the kind of husband who says to his wife "Don't bother to read it. Just sign here"?

[John Feldt ERPA CPC QPA]

If the plan has an SPD requirement, I think the disclosure to the participants has to identify the actual individual trustee(s) by name (unless a financial institution is the trustee, then the institution name is listed). The document and SPD may be able use titles or some other naming convention for convenience sake, but a signature is required to accept the role of trustee, and any time an individual gets removed or added as trustee, a notice to the participants with actual trustee names to satisfy the participant disclosure requirements. At least that's how I read the requirement, FWIW.

[Peter Gulia]

What do BenefitsLink mavens think about the idea of naming as trustee the plan sponsor business organization itself (if State law permits, or does not preclude, the organization from serving as trustee regarding its plan for its employees)?

[Bird]

What do BenefitsLink mavens think about the idea of naming as trustee the plan sponsor business organization itself (if State law permits, or does not preclude, the organization from serving as trustee regarding its plan for its employees)?

I don't like it. Ultimately, someone has to sign documents, and it seems to me you'd have to prove that the person who was signing actually had that authority, every time something had to be signed. Dealing with investment companies is hard enough without giving them an excuse to cause a hassle.

[MoJo]

I agree with Bird. I don't like either the plan sponsor being a trustee or a "named position." One cannot be a trustee without consent - so if a new person occupies the position without consenting to trustee responsibilities, you have a problem (and besides, someone may occupy the position who really isn't qualified to be the trustee...). Keep in mind, I know ERISA makes you a fiduciary based on the functions you perform - but being a trustee is a "special" type of fiduciary that certainly implies, if not explicitly requires, consent to serve in that capacity. Naming the plan sponsor (and I know of at least one law firm around here that insists that it is ok (and does so for their own plan)) is dangerous. Business entities cannot "function" and require real people to do so - hence, when an individual performs those functions, they are now ALSO a fiduciary - and may or may not be appropriately selected or supervised. I just think it raises more questions than answers. Plus, even thought hte plan sponsor may be a fiduciary by virtue of function, best not to "bet the firm" on virtually complete liability for plan assets.