Can a SERP plan invest in a tax qualified fund w/o disqualifying the fund,

my inclination is no since it is not a qualified plan but would like second,third opinions please

thanks

Pardon my ignorance, but what do you mean by "tax qualified fund?"

Since a Supplemental Executive Retirement Plan ( SERP) is not a qualfied plan, its assets cannot be commingled with the funds of qualified plan.

Or maybe the question relates to the possible investment in tax exempt securities?

nope. it was about whether placing the serp plan's money into a a tax preferred commingled fund would disqualify the fund, not regarding investments in a tax exempt security which, of course they are permitted to do.

thanks as always - i agree.

Pardon MY ignorance, but why does a SERP plan have assets?

RCK

I still do not know what you mean by a "tax qualified fund" or a "tax preferred commingled fund."

If, by chance, you mean a fund held in a trust that is deemed to be tax-exempt by virtue of Rev. Rul. 81-100, then the answer is that only 401(a) plans, certain governmental plans and IRAs can be investors in such a fund [and it's questionable whether an IRA could actually invest in such a fund due to securities law issues].

yes. a collective fund which receives its preferential tax treatment pursuant to rev ruling 81-100.


the SERP plan has assets held in trust for the beneficiaries of the SERP plan.

I thought that one of the requirements for a trust to qualify under 81-100 was that it was limited to investments from qualified plans and IRAs. Non qualified plan assets are not permitted in a trust that qualifies under 81-100.

i totally agree.

that takes us back full circle.

my question was whether the SERP was:

A - qualified
B - permitted to invest in an 81-100 vehicle without screwing up the preferred tax treatment of the 81-100 fund.

since we have now established that the SERP is not qualified, it would jeopardize (pronounced "screw up") the tax preferred treatment of the 81-100 fund.


thanks again.