One of our existing customers is requesting that we open a savings account for the "Customer Name Family Management Retirement Plan." The purpose of the account is to allow the trustee(s) of the retirement plan to collect employee retirement account transfers, to deposit employee salary deferrals, to deposit employer contributions and to make disbursements based on employee investment direction or requested transfers. The trustee will use the account as a temporary holding account of employee retirement funds prior to disbursing funds in accordance to the direction of the plan participants. (This was taken from documentation provided to us.)

I'm not sure if we should be entertaining this request. Anyone have any experience with these types of accounts? I would appreciate some guidance. I'm not comfortable with opening this account until I learn more.

I'm not sure where the "IRA" portion of this comes in, can you explain?

Ask for their letter from the IRS approving their ability to act as a nonbank trustee or nonbank custodian of an employee retirement plan.

To a fault, I always get distracted by figuring out what it is they are trying to accomplish; here the stated "purpose" is pure gibberish. As noted, what's missing is anyone who qualifies as a fiduciary under federal law.

Just tell them your bank only opens conventional retirement arrangements where you can use your own forms and ascertain your reporting responsibilities.

On second thought, just tell them "No" and send them to the competitor you dislike the most.

Well, I ended up talking to our law firm and they advised us to send them to an institution that has a trust department. We explained that we are not in a position to open accounts like this.

I was trust department legal counsel for five years... We would have thanked him for stopping by and indicated we would not open the account under any circumstances. This concept is literally make believe...