SECTION 13.543. Approved PEO's Conduct with Respect to the Plan and Trust

(a) Assessed contributions. Contributions assessed by the approved PEO from clients for coverage for their participants must be sufficient to fund at least 100 percent of the plan and trust's aggregate stop-loss retention, as provided in Division 6 of this subchapter, plus all other expenses of the plan and trust.

(b) Payments to the trust. An approved PEO must transfer to the trust all payments from clients or participants that represent or that are intended as contributions to the trust as soon as those amounts can reasonably be segregated from the approved PEO's general assets, but no later than 15 days after receipt. These payments are plan assets.

(c) Reimbursement from plan assets. An approved PEO may be reimbursed by the trust for its reasonable expenses incurred to:

(1) establish and initially administer the plan and trust; and

(2) comply with this subchapter, including contracting for stop-loss insurance and fidelity coverage.

(d) Transactions with respect to plan and trust. An approved PEO in its transactions with respect to the plan and trust must not:

(1) deal with plan assets in its own interest or for its own account;

(2) act on behalf of or represent a person whose interests are adverse to the interests of the plan or the interests of its participants; or

(3) receive any consideration from any person dealing with the plan and trust in connection with a transaction involving plan assets.

(e) Conduct with respect to plan and trust. An approved PEO's conduct with respect to the plan and trust must remain in compliance with applicable federal and state laws.

Source Note: The provisions of this §13.543 adopted to be effective May 17, 2016, 41 TexReg 3479