Who serves as an abandoned plan’s qualified termination administrator?

Will anyone please share information on which recordkeepers and directed trustees are willing to serve as an abandoned plan’s qualified termination administrator, and which are unwilling?

I'll answer my own question:

https://www.askebsa.dol.gov/abandonedplansearch/

26 minutes ago, Peter Gulia said:

I'll answer my own question:

https://www.askebsa.dol.gov/abandonedplansearch/

 

 

Peter, I don't think your answer to your own question is correct!  Aren't you looking for a list of QTAs that would be willing to accept the responsibility?  That link is to search for plans that are being handled by a QTA, or whether a specific plan is being handled by a QTA.  Isn't that a different thing?

You're right; it's no more than an indirect sense.

But the list of 6,271 plans and the list of trust or insurance companies that have taken on a QTA administration, including many that are big recordkeepers, affiliates of them, or directed trustees arranged with them, suggests that many are willing for at least some of the abandoned plans.

1 hour ago, Peter Gulia said:

You're right; it's no more than an indirect sense.

But the list of 6,271 plans and the list of trust or insurance companies that have taken on a QTA administration, including many that are big recordkeepers, affiliates of them, or directed trustees arranged with them, suggests that many are willing for at least some of the abandoned plans.

 

Makes sense..... good luck.

The last time I looked into this I think I came away with the feeling that a QTA kind of backs into the role after an existing client transitions into an abandoned plan and that almost nobody is willing to assume the role of a QTA for a plan that isn't already under their own roof.  Maybe things have changed.

Nick Saakvitne did this work when he was alive.  I think he was appointed by a federal court judge.  I suspect Fred Reish would know who is doing it now:  fred.reish@faegredrinker.com

None of these attorneys doing this will be cheap but I had to have one once for a plan whose sponsor had stolen plan assets and could only have another plan if a Court Appointed Trustee was the Trustee for distributions, etc.  Nick did a superb job for us and for the plan.

(I am a TPA now but was a sales person for a large insurance company when this happened.  I cannot imagine an insurance company or any other vendor being willing to do this.  There is a lot of potential  liability and it is just not the business they are in.)

Good luck!

PNJ

Large Recordkeepers do for those plans where they hold the assets which makes sense.  As you look at the list, eliminate those firms and concentrate on TPAs.  Know there are firms that will do for a fee (paid from plan assets).

A person cannot serve as a qualified termination administrator unless it is a bank, trust company, insurance company, or other business the U.S. Treasury department approves to serve as an IRA custodian.  And such an organization cannot serve unless it already “holds assets of the plan that is considered abandoned[.]”

https://www.ecfr.gov/cgi-bin/text-idx?SID=49516c01643ab98ff9f663ca7cab4a9e&mc=true&node=se29.9.2578_11&rgn=div8

A typical TPA doesn’t meet that QTA definition.

There are other kinds of appointments of a wind-up administrator, including appointment by:

a plan fiduciary, if anyone with authority will act;

a bankruptcy trustee, if there is a bankruptcy proceeding;

a court, if someone petitions the court.

For such an appointment, a TPA might serve.

My originating query was not about seeking a wind-up administrator.  I sought information to help me estimate how many of the plans that might become abandoned after the coronavirus emergency will lack a QTA’s service.  I asked not because I think a QTA’s service is desirable, but recognizing it is the only service that is self-appointing.

Hi Peter, 

I'm the CCO for PenChecks in San Diego. QTA is sometimes conflated with Ind. Fiduciary. Understandable but they're horses of different colors. We've been providing QTA services via our trust company subsidiary, as either the back-office service provider or as the named QTA, for several years now. Per DOL reg 29 CFR 2578.1(g)(1) and (2), the named QTA must be a regulated FI such as a bank, trust company, insurance company, etc., ("regulated community" as DOL collectively refers to them) and must hold the assets (i.e., custodian). Accordingly, TPAs and pure RKs can't be the named QTA although they could certainly perform as a back-office service provider. 
 

Mike McWherter, JD  | Chief Compliance Officer

PenChecks Inc / PenChecks Trust

direct: 800.541.3938 ext. 307 | mobile: 619.315.9220

mmcwherter@penchecks.com   |  www.PENCHECKS.com

PS  - Was typing my response before I saw your updated post. Give me a call at your convenience and we can discuss. It's close but not exactly self-appointing. EBSA ultimately controls that. Thanks - Mike