Can a non-US citizen sign the 5500?

US company was purchased by a UK company and we're winding the plan down.  The US people are all gone - at least anyone in any management capacity.  Can the person who is handling the plan at the UK company sign as Plan Administrator (and/or Plan Sponsor), or does that have to be a US citizen?  All I can find is that it has to be signed under threat of perjury, which makes me think that the signer must be subject to US law...  Thanks.

Did the acquirer buy the shares or capital interests of the company? Or did the acquirer buy assets from the company?

Would a non-US human have authority to act for the US corporation, limited-liability company, or partnership that serves as the retirement plan’s administrator?

The Form 5500 Instructions include this: “If the plan administrator is an entity, the electronic signature must be in the name of a person authorized to sign on behalf of the plan administrator.” (Or, if the plan’s administrator authorizes its service provider to file, that “manual” signature must be made by someone who has authority to act for the plan’s administrator.)

That someone signs under penalties of perjury suggests the signer ought to have acted prudently to form a sincere belief that the Form 5500 report “is true, correct, and complete.” Would a non-US human not previously involved know enough about the plan and its administration to form that belief?

This is not advice to anyone.

Thanks, Peter.

It was a stock purchase, so the UK company has all responsibilities.  I know I don't know anywhere near enough law to know what that entails for the UK co to operate in the US.  The UK people have been making all the decisions (for the plan and otherwise) since they made the purchase.  At least functionally, they are as much in the know as any other US-based client.

I am quite sure that all of my clients fully review the 5500s that I prepare for them and scrutinize every response to ensure that they are knowledgeable enough to sign the 5500.  Yep, that's what I'm going with. LOL
 

26 minutes ago, AlbanyConsultant said:

I am quite sure that all of my clients fully review the 5500s that I prepare for them and scrutinize every response to ensure that they are knowledgeable enough to sign the 5500.  Yep, that's what I'm going with. LOL

🤣🤣🤣

Thanks I needed that today!

There could be a more significant issue here.  I think that this structure likely does not violate the indicia of ownership rules for plan assets under ERISA 404(b) but that probably should be analyzed.  The bigger issue to me is that under the Code a plan is not tax-qualified unless its trust is a "domestic trust" under 7701 of the Code.  Under the control test portion of the statute, to be considered a domestic trust, one or more U.S. persons must have the authority to control all "substantial decisions" of the trust.  If an all-non-U.S. board is making the decisions for the plan, the trust could be classified as a "foreign trust". This would likely disqualify the plan for tax purposes.

A foreign trust is a trust other than a United States person trust.  I.R.C. § 7701(a)(31)(B); 26 C.F.R. § 301.7701-7(a)(2).

A United States person trust is “any trust if a court within the United States is able to exercise primary supervision over the administration of the trust, AND one or more United States persons [has or] have the authority to control all substantial decisions of the trust.”  I.R.C. § 7701(a)(30)(E); 26 C.F.R. § 301.7701-7(a)(1).

Even when the trustee is a United States person, a retirement plan’s trust is a foreign trust if the trustee is a directed trustee and a non-U.S. administrator or other directing person decides plan distributions or other “substantial decisions.”  26 C.F.R. § 301.7701-7(d)(1)(ii).  In addition, if a non-U.S. person has the power to remove, add, or replace the trustee, that power means the non-U.S. person controls substantial decisions of the trust.  26 C.F.R. § 301.7701-7(d)(1)(ii)(H).

If a nongrantor trust becomes a foreign trust, that “conversion” is treated as a sale of the trust’s assets from a U.S. person to a foreign trust.  This deemed sale means that the difference between the fair market value of the trust’s property and the property’s adjusted basis is income subject to federal income tax.  I.R.C. § 684.

It has been many years since I last looked at this; so, check all the citations and read for yourself.

The plan’s administrator should get its lawyer’s advice.

44 minutes ago, Peter Gulia said:

The plan’s administrator should get its lawyer’s advice.

YES!!!!!! Sadly, in my world, they rarely do.

hmmmm.. @Peter Gulia I believe you are agreeing with my post (at least generally) and are providing more detail, but I am not certain.  

Artie M, I do concur with your observation that there is a tax issue; and I cite sources so the inquirer can help the plan's administrator look up enough information to describe the issue to the plan's administrator.

That is something I literally never even considered.  I will raise it to the UK company, but given that they intend to terminate the plan and pay everyone out in the next six months, I don't think that they are going to take this step.