5585 - Establishment or use of common trust funds authorized.
SUBCHAPTER C COMMON TRUST FUNDS Sec. 5585. Establishment or use of common trust funds authorized. 5586. Restrictions on investments. 5587. Determination of interests. 5588. Amortization of premiums on securities held. 5589. Records; ownership of assets. § 5585. Establishment or use of common trust funds authorized. (a) General rule.--Every nonprofit corporation may establish and maintain one or more common trust funds, the assets of which shall be held, invested and reinvested by the corporation itself or by a corporate trustee to which the assets have been transferred pursuant to section 5549 (relating to transfer of trust or other assets to institutional trustee). Upon the payment by the corporate trustee to the nonprofit corporation of the net income from such assets, which income may be determined under section 5548(c) (relating to investment of trust funds) if such election is properly made by the board of directors or other body of the corporation, for use and application to the several participating interests in such common trust fund, the proportionate participation of each interest in such net income shall be designated by the corporate trustee. The nonprofit corporation may, at any time, withdraw the whole or part of any participating interest in such common trust fund for distribution by it as provided in this subchapter. (b) Limitations in trust instrument.--Nothing contained in this section shall be construed to authorize the corporation to invest assets of a trust or fund in any such common trust fund contrary to any specific limitation or restriction contained in the trust instrument, nor to limit or restrict the authority conferred upon the corporation with respect to investments by any such trust instrument. (c) Effect of good faith mistakes.--No mistakes made in good faith, and in the exercise of due care and prudence, in connection with the administration of any such common trust fund, shall be held to exceed any power granted to or violate any duty imposed upon the corporation, if, promptly after the discovery of the mistake, the corporation takes such action as may be practicable under the circumstances to remedy the mistake. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 21, 1998, P.L.1067, No.141, eff. imd.) 1998 Amendment. Act 141 amended subsec. (a). Section 4 of Act 141 provided that the amendment of subsec. (a) shall apply to all trusts, whether created before, on or after the effective date of Act 141. Cross References. Section 5585 is referred to in section 5587 of this title.