maxed

Trustee

The person who holds a plan's money in trust and controls its investment account. In a one-person plan, the owner is the trustee.

A qualified retirement plan's assets are held in a trust, separate from the business, for the benefit of the participants. The trustee holds those assets, signs for the plan's brokerage account and decides how the money is invested.

In a one-person cash balance plan the owner is usually the trustee, as well as the plan sponsor and plan administrator. In a Maxed plan you are the trustee. Maxed is not, and never holds or has access to the plan's money.

Being trustee means:

  • getting the plan's trust its own tax ID, separate from the business's (see the plan's tax ID)
  • opening a brokerage account in the plan's name at a firm you choose, and signing its forms
  • choosing the investments, and keeping them diversified if the plan uses actual return crediting
  • moving money only for the plan's purposes: contributions in from the business, and benefits out when they are due

Plan money has to stay separate from your own and the business's. Using it for anything else can be a prohibited transaction, which carries excise taxes. See investing cash balance plan assets.

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