QKA 2 Unit 8 Plan Disclosures

Question 1

What is the primary document provided to plan Participant’s about the 401(k)?

Answer 1

The SPD, a.k.a. summary plan, description

Question 2

Who needs to get the SPD?

Answer 2

Employees, who have satisfy the eligibility requirements

Terminated employees with account balances

Question 3

The SPD should be written in a manner that is reasonably expected to be understood by the average participant. The document should do the following:

Answer 3

Avoid technical jargon
Avoid complex sentences
Use examples and illustrations
Provide a table of contents

Question 4

The SPD is required to be provided to non-English-speaking participants if they satisfy the “substantial number”requirement. What is the substantial number for small plans? What is the substantial number for Large Plans?

Answer 4

Small plans: 25%
Large plans: the lesser of 10% of participants or 500

Question 5

When is the SPD required to be provided to New Plans?

Answer 5

No later than 120 days after the plan effective date or adoption of the plan

Question 6

For ongoing plans when must the SPD be provided to new hires?

Answer 6

No later than 90 days after they become eligible

Question 7

If you have a one month eligibility to defer and a one-year wait for employer contributions, when is the SPD required to be provided?

Answer 7

You would need to provide the SPD on the earliest entry into the plan

Question 8

Does the SPD have to be provided each year?

Answer 8

It must be provided every five years if there have been amendment made to the plan

Or every 10th year, if no amendments have been made

Question 9

What is often provided to participants instead of an SPD when changes have been made to a plan?

Answer 9

The summary of material modifications

Question 10

Do SMMs have to be provided to retired Participant beneficiaries who receive benefits for vested separated, Participant?

Answer 10

Not if the modification does not affect them

Question 11

When should you provide the SMM to Participants?

Answer 11

Best practices, is prior to the change
The law requires no later than 210 days after the close of the plan year in which the amendment was adopted

Question 12

What documents does ERISA require a plan provider to make available for examination upon request from Participants or beneficiaries?

Answer 12

The plan document
SPD
Form 5500
Trust agreement
Other documents, under which the plan is established or operated

Question 13

If a participant or beneficiary has requested documents related to the plan for examination, what time frame does ERISA require them to be provided in?

Can a fee be charged for printing?

How are copies provided?

Answer 13

30 days following a written request
A reasonable charge for printing copies may be assessed
Copies must be made available for examination at his principal office and certain other locations

Question 14

What parties are required to provide the 408b2 Client fee disclosure to the Plan Fiduciaries?

Who is included in this?

Answer 14

Covered service providers that are paid indirectly out of plan assets including:

TPAs
Recordkeepers
Investment Providers
Insurance Providers

Question 15

The 408B2 fee disclosure should list, the following 5 items: FRISC

Answer 15

1) fiduciary services?
2) recordkeeping fees
3) Indirect compensation
4) Services provided
5) Compensation paid by the plan

Question 16

It is the responsibility of the plan fiduciaries to ensure that the fees paid are reasonable, one can do this by: (3 ways)

Answer 16

Comparing this information to other providers of similar services

Documenting that a comparison of the fee and Services was done

Keeping all documentation in case you were audited

Question 17

The Participant fee disclosure is required under what section of ERISA?

Answer 17

404a5

Question 18

What types of employer plans are not required to provide Participant Investment Disclosures?

Answer 18

SEPs
Simple IRA
ERISA exempt 403B
(Unqualified plans)

Question 19

How frequently should the Participant fee disclosure be provided?

Answer 19

At least annually

Question 20

What are six items of general information that must be provided at least annually through the Participant Fee disclosure?

Answer 20

Plan Provisions

QDIA

Directions on investment instructions

List of Investment Managers

Limits on Investment transactions

Description of any SDBA

Question 21

Participant fee disclosures must also provide administrative expense information which include:

Answer 21

Explanation of fees that may be charged

How the expenses are paid

Question 22

In the Participant fee disclosure, individual expense information should include what two items:

Answer 22

Fees that may be charged to the individual

Fees that were actually charged

Question 23

If Fees are actually charged to Participant account, how often should the information be provided to the employee?

Answer 23

Quarterly

Question 24

Investment related information provided in the Participant fee disclosure should include what two items and how frequently should it be provided?

Answer 24

A listing of all investments, their performance, history, including benchmarks

All fees associated with investments

At least annually

Question 25

When is a blackout notice required to be given to Participants?

Answer 25

30 to 60 days prior to a Plan transfer

Question 26

What information should the blackout notice contain? (4 items)

Answer 26

Reasons for the black out

Name and contact info of the fiduciary who can answer

Investments and other rights affected

Expected date on which the blackout will begin and end

Question 27

A blackout period is defined as any period of how many consecutive business days?

Answer 27

When money is out of the market for three business days

Question 28

What are the primary means of enforcement for the SPD?

Answer 28

Audit

Court enforcement

Criminal penalties

Question 29

Which components of Participant investment disclosures must be provided at least annually? (3)

Answer 29

plan
administrative
individual expense
Info Disclosed
(PAId)

Question 30

Which components of Participant Investment disclosures should be provided on a quarterly basis? Which are required to be provided on request?

Answer 30

Quarterly: specific info about plan expenses,

individual expenses actually charged to Participant accounts

Question 31

When providing fee information, the method of allocation in the 404a5 notice must be

Answer 31

Pro Rata or per capita