Are The Trust And Fiduciary Provisions Sound?
Have the plan’s trust and fiduciary’s provisions been examined to address such subtleties as who is directing whom, their indemnification provisions (which, by the way, are currently the subject of controversy in the federal courts), or potentially the need for external fiduciaries or trustees, which will require significant alterations to your ESOP document and trust document. For example, how does a fiduciary invoke his or her indemnification? How does this mesh with your fiduciary coverage? Can You Save Money By Combining Plans? Is the company maintaining a 401(k) plan in addition to its ESOP? Should the plans be combined? Should the profit sharing component of the 401(k) plan or its matching provisions be used differently to allocate benefits that are currently held in the employee’s stock accounts? Will combining plans save administration costs? Some of these planning points fly in the face of conventional wisdom, which argues for separating 401(k) and ESOP plans. But in changing
