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"Prudent
Investor"
Rules for Qualified
Retirement Plans |
Companies
with qualified retirement plans including SEPs, SIMPLES, 401(k) must
follow the so-called "prudent investor" rules. Even if your business is
corporation, Limited Liability Company or LLP, you could be PERSONALLY
liable.
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Not following the
intracacies of the Prudent Investor Rules could result in Personal
liability for the Trustees and disqualification of the Retirement Plan
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If you sign any documents for
the retirement plan, or are name as a "Trustee," you are considered a fiduciary. This
means you can be peronally responsible for poor investment results.
This liability extends to investment decisions made by the company's
employees.
There is no good solution. Some
"professional" investment advisers can help the plan comply with the
"Prudent Investor" requirements. But do not plan to be
entirely shield from liability.
What to Do: Call
your tax and business lawyer,
Ronald J. Cappuccio, J.D., LL.M.(Tax) at (856) 665-2121 to
plan around these issues.
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