N.Y. Comp. Codes R. & Regs. Tit. 9 § 9003.5 - Miscellaneous requirements
(a) All
contracts and agreements entered into with a trustee , an independent
consultant , a financial organization , a firm of certified public accountants or
an administrative service agency shall be in writing, shall be awarded on the
basis of a competitive bid conducted or a search conducted in accordance with
section
9003.1(c)
of this Part in respect of the specific contract or agreement in accordance
with this Part, shall not exceed five years in duration, and shall impose no
penalties or surrender charges for the transfer of assets or responsibilities
on expiration of the contract or agreement. Where the board or a deferred
compensation committee enters into a contract or agreement with a trustee, a
financial organization or organizations, and an administrative service agency
and such trustee, financial organization or organizations and administrative
service agency is selected by the board or deferred compensation committee
independently from each other service, such contracts or agreements shall not
exceed 10 years in duration. Notwithstanding the previous sentence, no trustee
who is the only trustee of a plan shall be forced to resign the position of
trustee solely by operation of this subdivision prior to the time such person's
successor as trustee has been duly qualified and appointed.
(b) Notwithstanding subdivision (a) of this
section, when the board or a deferred compensation committee deems it to be in
the best interest of the plan, the board or any deferred compensation committee
may extend, in writing, by vote duly taken, any contract or agreement entered
into with a trustee, an independent consultant, a financial organization, a
firm of certified public accountants or an administrative service agency for a
duration not to exceed two consecutive one-year periods and with the consent of
such party; provided, however, that any such one- year extension shall be
implemented only upon:
(1) the expiration of
the initial term of such contract or agreement in the case of the first
one-year extension; or
(2) the
expiration of the first one-year extension in the case of the second one-year
extension. In the event that the board or a deferred compensation committee
implements such an extension, the board or the deferred compensation committee
shall describe in writing the reasons for its determination that the extension
is in the best interest of the plan.
(c) Neither the board nor any deferred
compensation committee may permit, nor enter into an agreement that permits, a
trustee, financial organization, independent consultant, administrative service
agency or any other person to select one or more other trustees, administrative
service agencies, firms of certified public accountants, independent
consultants, or financial organizations to provide services in respect of a
plan. Notwithstanding the previous sentence, this subdivision shall not
prohibit the board or any deferred compensation committee from entering into an
agreement with:
(1) a financial organization
selected and retained by the board or a deferred compensation committee, as
applicable, in accordance with this Subtitle, that provides for self-directed
investment services through a mutual fund or brokerage window arrangement
sponsored by such financial organization with respect to a plan, provided that
such self-directed investment services shall not be the sole investment
alternative provided under a plan and that the board and the deferred
compensation committee shall establish clear guidelines regarding participants'
access to, and level of participation in, such self-directed investment
services.
(2) a financial
organization selected and retained by the board or a deferred compensation
committee, as applicable, in accordance with this Subtitle, to manage the
stable income fund of such plan which authorizes such financial organization to
engage in one or more of the following fund management activities with respect
to the assets of a stable income fund:
(i) the
investment of the assets of the stable income fund in one or more guaranteed
investment contracts, provided, however, that such guaranteed investment
contract shall not exceed five years in duration;
(ii) the purchase of one or more wrap
contracts with respect to the assets of the stable income fund ; or
(iii) the periodic allocation of the assets
of the stable income fund between or among two or more other financial
organizations selected and retained by the board or deferred compensation
committee, as applicable, in accordance with this Subtitle, provided that, in
each case:
(a) the written agreement between
the board or deferred compensation committee, as applicable, and the financial
organization, expressly authorizes the applicable fund management activities
and states that the financial organization is a fiduciary to the plan with
respect to the fund management activities so authorized;
(b) any such fund management activity is
undertaken by the financial organization in accordance with reasonable
practices of the financial organization applicable to its clients generally,
and the financial organization receives no fee or other consideration from any
person (other than the plan) related to such fund management
activity;
(c) the guaranteed
investment contract or wrap contract, as applicable, imposes no penalties or
surrender charges for the transfer of assets or responsibilities on expiration
of the contract or agreement;
(d)
the trustee of the plan continues to be the owner on behalf of the plan of all
of the assets of the stable income fund; and
(e) any such fund management activity
complies with the criteria for selection and reporting of section
9003.3 of
this Subtitle and the then effective investment policies and guidelines of the
board or deferred compensation committee, as applicable, related to the stable
income fund.
A
Notes
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