Who can be the plan administrator/trustee?

[KevinMc]

A company in Denmark owns an American corporation and pays them commissions for sales in the US. If they have a 401-k Plan for US employees does the name and address of the US company have to be the plan administrator? Can the trustee be the controller in the Denmark company or would it have to be someone in the US as well? Any guidance is appreciated.

[QDROphile]

The U.S. Company need not be and should not be a fiduciary. The trustee (legal owner of the plan assets) must be a person who is subject to the jurisdiction of U.S. Courts. I have doubts about the the Danish controller.

[mbozek]

My understanding is that the trust for the plan must be a US domiciled trust and that the indicia of ownership of the assets must be within the jurisdiction of the US courts. What I dont know is whether a foreign corp could be the plan administrator and have its controller sign the necessary govt forms. Providers may restrict who represent the plan. Closest analogy I know of was a case where a Hong Kong corp established a qualified plan for its sole US employee. Court held that plan was subject to the Qdro rules of Title I. I assume you can check the instructions for filing the 5500 to see if there are any restrictions on who can be administrator.

[Bill Presson]

The U.S. Company should not be a fiduciary.

I'm curious about this part of your post. If the US Company is the sponsor of the plan, are you saying the company should not be named the Plan Administrator? If so, why?

[QDROphile]

The corporate sponsor of the plan should not be named as plan administrator, with few exceptions. I have made the comment and explained the reason in greater detail in many posts. Very succintly, if the corporation is a fiduciary, then every director and executive officer is at risk of being treated as a fiduciary, and will be a named defendant in any action relating to fiduciary responsibility. Those persons will not know of the exposure and will not comport themselves in a manner befitting a fiduciary, which is high assurance of liability under ERISA. Only those individuals who will actually undertake fiduciary functions and responsibility should be named as plan administrator and they should be aware of the designation so they can perform as required.