a two trustee plan has violated the annual addition limits as one participant, who happens to be one of the trustees, received in excess of his 2009 earnings. He refuses to sign off on a refund. Can the other trustee request the refund without the others signature?
Full Version: 415 violation and trustee does NOT want refund
QUOTE (Lori H @ Nov 18 2009, 01:47 PM) 
Can the other trustee request the refund without the others signature?
That would depend on the trust language, which should indicate if each individual can act independently, or if a majority or unanimity is required.
One Trustee's refusal to act will jeopardize the qualified status of the plan. I think the other Trustee has an obligation to act to protect the participants, regardless of what the plan and/or trust documents say.
QUOTE
Act Sec. 404.(a)(1)
PRUDENT MAN STANDARD OF CARE. --Subject to sections 403(c) and (d), 4042, and 4044, a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and --
(A) for the exclusive purpose of:
(i) providing benefits to participants and their beneficiaries; and
(ii) defraying reasonable expenses of administering the plan;
(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
(C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title and Title IV.
PRUDENT MAN STANDARD OF CARE. --Subject to sections 403(c) and (d), 4042, and 4044, a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and --
(A) for the exclusive purpose of:
(i) providing benefits to participants and their beneficiaries; and
(ii) defraying reasonable expenses of administering the plan;
(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
(C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title and Title IV.
QUOTE (Kevin C @ Nov 19 2009, 09:51 AM)
I think the other Trustee has an obligation to act to protect the participants, regardless of what the plan and/or trust documents say.
Following the terms of the trust and protecting the plan and participants are not necessarily mutually exclusive. Certainly there are other rememdies available.
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