Trustee being removed, needs to sign amendment?

Plan has two trustees.

One of them has retired and is simply no longer involved or around.

There is no board for this small company.

Can plan be amended to only the one remaining trustee by this one remaining trustee and not involve the outgoing one?

Sure - and some plans might even say you don't need a formal amendment.  (Definitely an SMM, though.)  The document/trust agreement should have language for how to address the removal of a trustee. 

I typically see it where either the company or the trustee gives the other party 30 days' notice, with the ability to agree to shrink that 30 day period by mutual agreement.  The company could send the old guy such a notice that he'll be officially "out" as trustee.

While not disagreeing with Bri's answer, another approach is to have the trust agreement provide that, to the extent a trustee is an employee of the plan sponsor, she or he shall be deemed to have automatically resigned his/her trusteeship upon terminating his/her employment with the plan sponsor.

I like Rockn's suggestion. Not being an attorney, I wonder if such a provision is valid under State law in all 50 States? This isn't a provision I've seen, although honestly I haven't looked for it before...

45 minutes ago, Belgarath said:

I like Rockn's suggestion. Not being an attorney, I wonder if such a provision is valid under State law in all 50 States? This isn't a provision I've seen, although honestly I haven't looked for it before...

Part of the problem is that a trustee (or other fiduciary) remains a trustee (or fiduciary) until a successor takes over.  So, if you have one trustee (or other fiduciary), who ceases to be an employee and that severs their responsibilities under the governing documents, they by "operation of law" must continue until someone else takes over.  I'm dealing with that issue right now.  The Plan Administrator (allegedly) embezzled from the company and the plan, the company shut down (no formal bankruptcy), the DOL is criminally investigated, the DOL is responding to participant inquiries, and we, as a "non-discretionary, directed, ministerial" service provider (recordkeeper) have no authority to act on any participant distribution requests.  The "ex" CEO (PA) disclaims any further responsibility, and no one else is willing to step up to the plate.  All we can do is give participants the phone number for the DOL regional office.  At some point, it may meet the definition of an abandoned plan, but ....

16 hours ago, rocknrolls2 said:

While not disagreeing with Bri's answer, another approach is to have the trust agreement provide that, to the extent a trustee is an employee of the plan sponsor, she or he shall be deemed to have automatically resigned his/her trusteeship upon terminating his/her employment with the plan sponsor.

I've seen that and even checked the current FTW trust agreement but it's not there. Honestly I'm leery of having automatic things like that as the results may not be desired.

Bottom line is this is no big deal and the plan should be amend-able to remove the one trustee.

Just curious, does an amendment—whether of a plan document, or of a separate trust document—to remove a trustee (and perhaps appoint another) incur a fee?

Or is this routine processing with no incremental fee?

Peter, I think that would depend upon the agreement with the TPA or other document provider. We typically do not charge a fee for routine amendments such as this.

For a firm that had an ongoing document maintenance fee, they might not charge. 

Old job:  we would charge for any amendment.  It wasn't too much as to prohibit someone from making a change.  It's time and effort, after all.  

New job:  many clients have a document maintenance fee.  They get all required amendments on the house (with the exception of the very first one we do for them--new plan or takeover).  And they get one "free" discretionary amendment per year.

Side note:  Datair docs have an add/remove trustee resolution already premade.  We made use of it often.

23 hours ago, Peter Gulia said:

Just curious, does an amendment—whether of a plan document, or of a separate trust document—to remove a trustee (and perhaps appoint another) incur a fee?

Or is this routine processing with no incremental fee?

Favorite answer:  It depends.

Personally, I prefer to have a fee for everything, and then waive the fee when appropriate.  This way the client understands that we have to do some work for every request, they are "happy" when the fee is waived, and I have the fee there for me to bill for clients who do it over and over. 

Amen to RGB's response. We send them an invoice with a "courtesy discount" which shows the full fee, minus the discount to zero it out. They can see how nice we are that way. And in some cases, we bill the full or partial amount if appropriate in the circumstances.

Do you get credit for the gross or net amount you bill?

I worked at a place where your bonus was partially calculated on your billings for that year.  It was based on the gross amount in our shop, but freebies were always scrutinized, so you couldn't bill $100,000 gross, but have a $75,000 net.

In my fee statements, I include (in chronological order) descriptions of tasks I choose not to bill with as much detail as for tasks billed.

Among other advantages, this creates another record about work I did and advice I delivered. If ever there is the question “Why didn’t you tell me . . . .”, it’s nice to have an extra way to show I delivered the advice.

For an audit, I can truthfully confirm the statements needed for an ABA/AICPA no-undisclosed-loss-contingencies letter looking only at my billing entries. If there is no entry in my fee statements, I must not have given “substantive attention” to whatever might have been or became a potential loss contingency.