(a) Establishing the trust. A PEO applying for a certificate of approval must establish a trust in compliance with both Texas Property Code Title 9, Subtitle B, concerning Texas Trust Code: Creation, Operation, and Termination of Trusts; and the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1103, concerning Establishment of Trust, in which all funds used to administer and pay claims and expenses arising from the plan must be held.
(b) Powers of the trust. Except as otherwise provided in the trust document, the powers of the trust must be exercised by a board of trustees elected to carry out the purposes established by the organizational documents of the trust.
(c) Trust agreement. The trust agreement or other document establishing the trust must:
  (1) include the names of the persons creating the trust and the names and signatures of each of the initial trustees;
  (2) state that all plan assets will be kept continuously in a qualified financial institution;
  (3) outline the powers and duties of the board of trustees;
  (4) provide that board decisions must be made by at least a simple majority;
  (5) give the trustees exclusive authority and discretion to manage and control plan assets;
  (6) provide that the trustees will not be subject to the direction of a named fiduciary; and
  (7) provide that plan assets will never inure to the benefit of any employer and will be held for the exclusive purposes of providing benefits to plan participants and defraying reasonable expenses of administering the plan.
(d) Trust amendment. The trust agreement or other document establishing the trust must provide that:
  (1) only the plan's trustees may amend the terms of the trust, and may do so without the approval of the approved PEO;
  (2) an amendment to the trust document must be approved by at least a simple majority of the trustees; and
  (3) a trust amendment must be submitted to TDI as provided in §13.552 of this title (relating to Required Filings) for review and approval by the commissioner before becoming effective.

Source Note: The provisions of this §13.551 adopted to be effective May 17, 2016, 41 TexReg 3479