CH 13 - Plan Installation & Administration Flashcards
What are the THREE steps to adopt a corporate plan?
- Corporate board resolution adopting plan and trust
- Draft and execute plan or trust documents
- Notify participants and explain plan to employees
This is a clear and simple description of plan terms (eligibility, vesting, benefits, withdrawals) that is to be distributed to all participants.
SPD
When is the SPD due?
120 days after adoption date
What is an advance determination letter?
A voluntary process that verifies a plan is qualified and has made all requirements.
When is the advance determination letter due?
The date of the tax return
When should the following forms be filed?
A) Form 5500
B) 5500-SF
C) No filing or Form 5500-EZ
- A) Normal qualified plan
- B) Small qualified plans with less than 100 employees
- C) One participant plans less than $250K
Form 5500 consist of a main form with two attachments. Define what the TWO schedules are for.
Schedule A - ______
Schedule B - ______
A - insurance
B - actuarial form for DB plans
An independent CPA will generally complete a financial audit with how many participants?
more than 100 participants
A). What is a SMM?
B). What is a SAR?
A). Summary of Material Modification that gives notice of “material changes” to a qualified plan’s SPD
B). Summary Annual Report that gives a summary of the financial information on Form 5500.
What is the purpose of a QDRO?
ERISA retirement benefits must satisfy anti-alienation rules, thus prohibiting reassigning plan benefits to another individual. A QDRO is a court order that allows benefits to be paid to an alternate payee (eg - spouse, child, dependent).
What are the FOUR duties of a plan administrator?
- files a 5500
- participant distributions
- distribution of SAR (Summary Annual Report)
- determines if a QDRO is qualified
When are TWO reasons an enrollment meetings is required?
If the plan allows salary deferrals (employee contribution plans like a 401(k) or 403(b)) and for direction of investment.
