"Financial service companies are being held to a higher anti-money laundering standard and are demanding that a check representing a plan contribution to be deposited into a new investment account have the same name on the check as the name of The Plan.
I have numerous clients with one participant plans who have numerous companies. They may have a plan with a name based on the company they own that was quite active 20 years
ago but not very active today. That shouldn't matter since they could have named the plan anything they wanted. At least to my knowledge, they could name their planned SpongeBob if they wanted.
If an individual owns three or four companies, however, and company A started the plan 20 years ago with it's name on The Plan, that plan covers all the employees of all the companies he owns, he just happens to be the only employee so
any of the companies could make the planned contribution, at least from what I've learned over the years. The CPA's never have a problem with this. I work with them closely.
This is causing a huge inconvenience from my clients who may be forced to run money through a company that's been dormant for some time. Or, I suppose the only alternative is to change the name of the plan to the name of the company writing the check.
Witch is stupid, because no such thing is required in qual plan rules.
Or, what I'm going to try first, is adding the name of the company writing the check as a cosponsor of the plan (which it is a de-facto Co-sponsor by virtue of 100% common ownership anyway) and send the investment company the corporate resolutions and adoption agreement effectuating the Co-sponsorship of the plan with company A's name by the company B who
is writing the check. Anyone have any thoughts on this?"