Ask the Experts August 14, 2018

(b)lines Ask the Experts – Why 403(b) Assets Are Generally Not Held in a Trust

“Why are 403(b) plan assets generally not held in a trust?”
Reported by

Stacey Bradford, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:

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The Employee Retirement Income Security Act (ERISA) generally requires that all of the assets of an employee benefit plan be held in trust by one or more trustees. But, there are certain exceptions to this rule that cover 403(b) arrangements. 

The trust requirement does not apply to assets of a plan that consist of insurance contracts (including annuity contracts) nor does it apply to assets held in one or more custodial accounts pursuant to section 403(b)(7) of the Internal Revenue Code. See ERISA Sections 403(b)(1) and 403(b)(5).

Of course, not all 403(b) arrangements are subject to ERISA but all of them need to meet the requirements of Code section 403(b). In that regard, Code section 403(b)(1) generally extends tax-favored treatment to annuity contracts (not trusts); Code section 403(b)(7) also provides that amounts contributed to certain custodial accounts (not trusts) that invest in mutual funds will receive the same tax-favored treatment.  

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

 

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Break from the Grind August 13, 2018

TRIVIAL PURSUITS: How Do Cobwebs Form?

Cobwebs present an irritating cleanup for most homeowners.
Reported by

How do cobwebs form in a house?

 

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Unfortunately, if you have cobwebs, you also have spiders as housemates—mainly those of the species Theridiidae (look it up and it will gross you out). They form webs in corners, crevices and even on walls in the home to catch prey or lay eggs. The webs are hard to see because they are thin strands of silk.

 

However, when these spiders abandoned their webs—perhaps to find a better hunting ground for prey—the webs attract dust, pollen and even have remnants of their kills stuck to them.

 

An entry on www.maids.com says to prevent cobwebs from forming in your house use scents that drive spiders away. As they taste with their legs, they won’t enter an area that has traces of lemon, peppermint, or eucalyptus. Dab some of these flavors onto small cotton balls and hide them inside the cracks you can’t seal, or spray the scents directly in the corners of your home.
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