As a rule, the agreement describes the payment by the person that is paid to the custodian bank, which, in turn, ensures that the funds are held with a bank or other financial institution. Depending on the nature of the account, the custodian bank may not be held liable if the worker`s employer does not provide the necessary resources for the service. For example, if a company does not contribute to a retirement plan, any losses are not the responsibility of the custodian bank. The employee, not the custodian, may be required to keep all records confirming that the distribution has been exempt from tax. It could also be left to the worker, not the custodian, to determine what income taxes are due on the distribution and whether there would be any tax penalties. . . .
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