Non- prototype account
A client’s mother passed away and she had a non protoype account at Fidelity titled as a defined benefit plan. After reporting the death, Fidelity sent claim paperwork and asked for a copy of the plan document to ensure proper distribution. The client does not have a copy so we asked Fidelity for a copy of all account opening documents they had. They only sent a copy of the original application. The mother was the only trustee listed. It seems there was never a plan document submitted. Was the mother exempt from filing documents since she was the only owner/employee? What can be done to have Fidelity release the funds with a plan document? Client has letter of testamentary.
Permalink Submitted by William Tuttle on Tue, 2022-04-05 16:07
Investment only account is another name for a non-prototype account. Fidelity is only acting as a custodian for this account’s assets.
A plan document is required for all retirement accounts. If the client can not find the plan document this is a problem.
There has to be a plan administrator. While I don’t recommend it a non-prototype one-participant 401k plan can be self-administered. I have never heard of a self-administered defined benefit plan. Not to mention an actuarial.
It is almost certain that the client’s mother had both a third party administrator (TPA) and an actuarial.
The client should do further research of he mother financial papers. There may or may not be a plan document. If not it is crucial she did determine who the TPA and/or Actuarial are. One or both of them should have a copy of the plan document and be able to help.
Permalink Submitted by Kiersten Ambrose on Tue, 2022-04-05 16:16
Thank you. The account was opened in 1998. We have been researching online to see if anything was filed in the past
Permalink Submitted by Dan Zaehring on Wed, 2022-04-06 03:54
Although this account apparently has no connection with an IRA, nevertheless the client should be looking through his mother’s business records for reports from an actuary which are necessary to contribute funds to such a plan. The actuary preparing those reports would definitely have the plan document. Since the benefit usually is in the form of a life income, any excess remaining after the life income has been fulfilled would revert to the business maintaining the plan.