The plan-trustee may (but is not required to) establish a procedure for the periodic review of directed investments and any other plan-trust investments to determine, in light of the facts and circumstances known to the plan-trustee, whether any actual or proposed investment constitutes or would constitute a prohibited transaction within the meaning of I.R.C. § 503. If the plan-trustee, in his, her or its sole discretion, finds that any investment constitutes or would constitute a prohibited transaction, the plan-trustee shall promptly give notice to the employer, and shall recommend that the employer prevent or dispose of the investment or otherwise prevent or remedy the transaction. If the employer fails to prevent or remedy a transaction that the plan-trustee finds is a prohibited transaction, the plan-trustee may (but is not required to) take any action required or permitted by applicable law. However, if the plan-trustee finds that a prohibited transaction causes or would cause the plan-trust to be maintained other than for the exclusive benefit of participants and their beneficiaries or otherwise contrary to § 36.004, the plan-trustee shall take such action as is sufficient to cause the plan-trust to be maintained for the exclusive benefit of participants and their beneficiaries.
(Ord. NIRC 97-1, passed 1-15-1997)