401k Rollover Glossary

F - I

Fidelity Bond:

In accordance with Section 412(b) of ERISA, all fiduciaries and any other individuals who handle plan assets are required to be covered by a fidelity bond. The purpose of the fidelity bond is to protect a retirement plan's assets from loss due to dishonesty, fraudulent activity or negligence on the part of the fiduciary or any other individual who handles plan assets.

Fiduciary:

Defined by ERISA as any person who:

• Exercises discretionary authority or control over the management of a plan or the management or disposition of its assets in any capacity.
• Renders investment advice for a fee with respect to the funds or property of a plan or has the authority to do so.
• Has discretionary authority or responsibility in plan administration.
  Fiduciaries must discharge their duties solely in the interest of the participants and beneficiaries of an employee benefit plan. In addition, a fiduciary must act exclusively for the purpose of providing benefits to participants and beneficiaries in defraying reasonable expenses of the plan.

   

• Has discretionary authority or responsibility in plan administration.
  Fiduciaries must discharge their duties solely in the interest of the participants and beneficiaries of an employee benefit plan. In addition, a fiduciary must act exclusively for the purpose of providing benefits to participants and beneficiaries in defraying reasonable expenses of the plan.

Hardship Withdrawal:

An in-service withdrawal from a retirement plan due to immediate and heavy financial need (generally due to purchase of primary residence, prevention of eviction or foreclosure, payment of medical expenses and post-secondary education tuition) for which no other personal assets are available.

Institutional Trustee:

An entity responsible for the management of plan assets accounted for in a segregated trust account; the Institutional Trustee may produce administration reports confirming receipts, disbursements and asset valuations, write checks, calculate and remit federal and state withholding taxes and produce and file tax forms.

Form 5500:

Annual financial report of plan activity.

IRS Form 5300:

Used to qualify a custom document with the IRS.

IRS Form 5307:

Used to qualify a nonstandardized adoption agreement of a prototype plan with the IRS.

Back to Glossary A - E | Go to Glossary M - Z