Any restrictions on employees that can recieve an incentive for Trust Department accounts that are opened? or putting it another way, are their any specific or groups of empoyees that would not be eligible for an incentive?

I am assuming that the trust officers who actually handle the accounts would not be eligible. What about others who work in the trust department but don't determine the handling of the accounts? anyone else I should be thinking of?

I do not know for sure, but I will say we pay incentives for trust referrals to all (except trust officers and maybe the real top execs don't get it, but I'm not sure). Loan people, teller people, back office, those types are all eligible.

Thanks Red.

Anyone else out there have anything more concrete. I have been searching to no avail.

Thanks

You may want to look at your regulators examination procedures. They may indicate what is allowed/not allowed, without searching through volumes of laws,codes, etc. The procedures s/b available on the regulators website.

There are limitations on incentives for NDIP's but I don't remember specifically what they are.

NDIP,yes, but trust services? I've always thought of these as two different animals. NDIP for us are insurance sales, annuity sales, mutual funds. Our trust area is investment management, trust administration, etc. I've never thought of trust as NDIP. Please elaborate.

Our bank pays referral incentives to employees on new trust business. I know of no regulatory restrictions on the amount you can pay, provided you can justify the amount as reasonable and the payment of the incentives do not jeopardize the financial well-being of the department, division, or bank.

As for whether trust division activities are covered under the guidance for NDIP's. - I say NO - Two completely separate things, although similar in certain respects. I think of NDIPS falling under the regulatory pervue, either directly or indirectly, of the NASD, the SEC, the State Insurance Department, or the State Securities Regulatory Commissioner (or comparable department in your state). As long as your trust activities are done under the bank charter and are under the primary supervision of your bank regulators, I don't believe you need concern yourself with the guidance regading NDIPs.
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But that's just my opinion ------- and you didn't pay for it, so what's it really worth????

Well my excuse for listing NDIP's.....I used my "speed-reading skills" on the original question. I saw "employee incentives", but failed to see that the question was specifically about Trust Services. I'll try to be more observant next time!

We have the program set and the incentives are reasonable and well documented. However, my question really was can anyone who works in the bank receive the incentive? I would assume that some employees would not be eligible, such as the trust officers...is there anyone else that would not be eligible to receive the incentives?

There are no regulatory restrictions that I am aware of, on who you can or cannot pay trust referral incentives to, provided the amount of the compensation is fair, reasonable, and does not place the bank's capital at risk.

This should be a matter of internal policy. If you wish to exclude trust officers or executive management from being eligible for the incentive payments, that would be a decision of your internal management in drafting the policy. But I do suggest that you run the incentive program past in-house counsel to be certain you don't get cross-wise with any potential discriminatory action within your employment ranks.

But as a matter of course, why would you want to exclude trust officers from participation in the incentive compensation? Is it because you are sensitive to the potential conflicts of interest or self-dealing claims or exclusive benefit concerns? Our trust officers represent a significant source of new business. Both in the terms of new accounts and additional assets being added to existing relationships.

Well, On the Edge, don't feel defensive for coupling NDIPs and Trust Department activities. We should all take a look at FIL-79-2004 put out by the FDIC. I don't know how or when the other regulators distributed this notice, but this proposed rule by the SEC most certainly will impact Trust departments as well as the sale of NDIPs. Many rules apply to both, and at our bank, many activities of both areas (trust and NDIP sales) seem to overlap. There is discussion in this FIL about compensation to non-registered bank employees being paid referral fees, so please take a look.

Don, I didn't mean to sound defensive. I was just aggrevated with myself for not reading the original post more carefully. But if I understand you correctly, I may have stumbled into an applicable answer after all, right? Thanks