Assignment 9 - Plan Sponsor Administration

Question 1

a personalized stmt that must be provided to a partic. either upon request, or at specific intervals for various types of retirement plans

• DB - @ least once every 3 yrs (but partic. can request every 12 mo.)
• DC - if partic. directs inv. - every quarter; if partic. doesn’t direct inv.- every yr

Answer 1

benefits statement

Question 2

• a sum rpt on the fin. status of an EE benef plan
• must be given to partic.
• no longer required for a DB plan (just annual notices)
• provided within 120 days in writing or electronic form to: PBGC, plan partic., and benef.

Answer 2

Summary annual report (SAR)

Question 3

an indiv. that exercises any discretionary authority or control over mgmt of the plan or assets held in the plan

Answer 3

fiduciary

Question 4

certain transactions b/w a plan and a “disqualified person”

Answer 4

prohibited transaction

Question 5

for purposes of qualified retirement plans, a written program maintained by an ER for the benefit of EEs or benef. that is intended to be permanent and is communicated to EEs

Answer 5

plan document

Question 6

provided to partic. when there has been a signif. chg to plan provisions

• written in clear language
• distrib. automatically to all affected partic. and benef.
• bust be furnished w/in 120 days after the end of the plan year in which chg is adopted

Answer 6

summary of material modification (SMM)

Question 7

Under ERISA, this org. has jurisdiction and admin over min. partic., funding, vesting requirements, joint and survivor protection for spouses of employees.

Answer 7

IRS

Question 8

Under ERISA, this org. has jurisdiction and admin over the determination of service for elig., vesting, and benefit accrual.

Answer 8

DOL

Question 9

Distrib. requirements of SPD

Answer 9

1. if new EE = within 90 days
2. if new plan = whitin 120 days after establ.
3. if new, complete SPDs = filed/distrib. every 10 years
4. if material changes = file/distrib. every 5 years

Question 10

SPD requirements (per ERISA)

Answer 10

1. plan name and type
2. type of plan admin
3. name and address of person designated as agent for service of legal process
4. name, address, and number of plan admin.
5. name and address of ER that maintains plan
6. name and/or title of each trustee
7. ER’s TIN filed with IRS
8. if CB plan - list of sponsors and info about whether a particular ER is sponsor and address; stmt that it is maintained in accordance w/ the agreement
9. plan elig. requirements
10. description of provision for nonforfeitable benef.
11. info about vesting forfeiture of benef., credit service, breaks-in-service
12. joint and survivor benefits description
13. circumstances that may result in disquali, inelig., denial, loss, forfieture, or suspension of benef.
14. relationship with PBGC
15. source of contribs. to plan
16. description of plan benef.
17. date of the end of the plan year
18. procedures to be followed in presenting claims for benef.
19. stmt of partic’s rights under ERISA

Question 11

**designed to require a complete disclosure of all fin. info relevant to the operation of the plan.

• filed on Form 5500
• w/in 7 months after close of each plan year
• includes: stmt of A&L’s; chgs in A&L’s; stmt of receipts and disbursements

Answer 11

Annual Report

Question 12

Joint and Survivor Notifications

Answer 12

1. post-retirement surv. benef. = 9 month b4 earliest retirement date under the plan
2. pre-retirement surv. benef. = b/w 1st day of the plan yr in which partic. turns age 32 and the end of the plan yr in which he/she becomes 35

must be given enough info about the potential financial impact

Question 13

rollover notifications

Answer 13

• w/in reasonable amt of time before making distrib.
• explains rollover and direct transfer rules
• tax w/holding requirements on distrib. that are not directly transferred
• how taxs can be reduced or deferred

Question 14

• partic. comm. piece that provides, in “plain English”, the key features of the plan
• req’d to be provided to all partic.
• new partic. w/in 90 days; initial plan w/in 120 days
• must be perm. form and current regarding all aspects of the plan and info req’d by ERISA

Answer 14

Summ Plan Descript (SPD)

Question 15

annual fin. rpt filed w/ the DOL each yr for the plan

• additional requirements set by PPA
• must be accessible and readily available to all interested parties
• filed/posted in electronic format by DOL within 90 days of filing
• must be on display on any intranet site maintained by the plan sponsor

Answer 15

Form 5500

Question 16

audit requirements

Answer 16

plans w/ over 100 partic.must be audited every year

filed with 5500

Question 17

core activities for EE benef.

Answer 17

1. benef. plan design
2. benef. plan delivery
3. benef. policy formulation
4. comm
5. apply tech
6. cost mgmt and resource controls
7. mgmt rptg
8. leg/reg compliance
9. monitoring external environ.

Question 18

ERISA Title I disclosure requirements

Answer 18

• to partic and their beneficiaries; gov’t
• most tax-qualifed plans
• limited exemptions: unfunded excess benef plans that fail 415 limitations;
• limited disclosure requirements for plans that are for the exclusive benef. of a “select group of mgmt or HCEs”

Question 19

list of items that needs to be supplied upon request

Answer 19

• benef. stmt
• supporting plan docs
• complete app made to IRS with plan’s tax-qualified determination
• complete copy of plan’s annual fin. rpt
• plan term. rpt (IRS 5310) should the plan be terminated

Question 20

SPD distrib. timing

Answer 20

• if new EE - w/in 90 days
• to benef. - w/in 90 days after start of benef.
• for new plans, initial SPD - w/in 120 days of start date
• new complete SPDs - at least every 10 yrs
• if material chgs - at least every 5 yrs

Question 21

denial of benefits process and requirements

Answer 21

• if denied, EE is entitled to written stmt giving reasons for denial (usually 90 days)
• s/b clear, comprehensible stmt of reasons for denial
• include a descrip. of any material info necessary for claimant to improve the claim
• give full descrip. of plan’s appeals procedures
• must be given at least 60 days thereafter in which to appeal the claim
• entitled to a final decision in writing w/in 60 days of appeal

Question 22

ERISA penalties for disclosure problems

Answer 22

• if plan sponsor doesn’t provide any provisions upon request - personally liable to indiv. for fine of up to $110 per day
• willful violation of any provisions - criminal penalty up to $5,000 fine &/or 1 yr in prison for indiv.; up to $100,000 for corp.
• civil actions brought against plan admin by partic./benef. to enforce their rights to obtain specific information
• civil actions brought by sec. of labor, partic., benef, another fiduciary against an indiv. who breaches his/her fiduciary duty