Choose a 401k trustee/administrator (small business, company, 401k plan, cost)

[CTbrooktrout]

I think the correct term is "trustee" but the person at the company who is the main contact and keeps everyone's info and keeps the 401k plan in line with employees.

Who is usually the trustee at a small business... the owner? Who should NOT be the trustee?

Appreciate your opinions.

[chet everett]

The "trustee" has legal responsibilities, and the "named fiduciary" must be identified to the IRS & Department of Labor to provide compliance information.

In a small business the "sponsor" almost always uses a third party as a "plan administrator" but the owner or other highly trusted employee has the legal responsibilities of "trustee" and "named fiduciary". There is no legal reason NOT to do this and there is only extra cost with hiring outsiders for these roles.

Anyone in the the firm that has demonstrated an ability to maintain timely and accurate information about employees, is privy to compensation information, and has an excellent sense of confidentiality is suited to the roles, and anyone who has NOT demonstrated those qualities should be eliminated from consideration.

Answers to 401k Trustees & 401k Fiduciaries Responsibilities

[Plain Jane 3953]

I can't answer your query regarding who should be a Trustee but I do want to say to those who think they have a 401K - they need to make damn sure that they do. The LA Times had a story about a guy, who worked for a small business, who thought he had a couple of hundred thousand in a 401K only to find out his boss never even set up a 401K and used the funds for the business.

I am sure this would be a rare occurance but still - it can happen.