SECTION 13.553. Plan and Trust Governance and Operation

(a) Fiduciary duty. A fiduciary must discharge his or her duties with respect to a plan solely in the interest of the participants, and:

(1) for the exclusive purposes of:

(A) providing benefits to participants; and

(B) defraying reasonable expenses of administering the plan;

(2) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; and

(3) in compliance with the documents and instruments governing the plan so long as those documents and instruments are consistent with this subchapter and with all other applicable state and federal laws.

(b) Transactions between fiduciary and plan. A fiduciary 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 party dealing with the plan and trust in connection with a transaction involving plan assets.

(c) Plan and trust expenses. All expenses of the plan and trust must be paid from plan assets. Expenses include but are not limited to:

(1) administration of the plan and trust; and

(2) the plan and trust's reasonable expenses incurred to comply with this subchapter, including contracting for stop-loss insurance, fidelity coverage, and errors and omissions insurance.

(d) Voluntary termination of trust. The trust agreement must provide for the distribution of plan assets on dissolution of the trust. The distribution of assets must be consistent with of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1103 and §1104, concerning Fiduciary Duties, and related guidance by the U.S. Department of Labor. The trust's assets may not be distributed until the commissioner has canceled the approved PEO's certificate of approval under Division 8 of this title (relating to Market Exit).

Source Note: The provisions of this §13.553 adopted to be effective May 17, 2016, 41 TexReg 3479