Schwab RT SQL Recordkeeping Operations Library. Paperless Transactions For Recordkeeping and Web

Transcription

1 Schwab RT SQL Recordkeeping Operations Library Paperless Transactions For Recordkeeping and Web

2 Schwab RT Recordkeeping Operations Library Paperless Transactions For Recordkeeping, and Web, and Call Center (Releases 2.0, 2.1, and 2.3) October, 2006 Copyright 2006 by Schwab Retirement Technologies, Inc., a wholly owned subsidiary of The Charles Schwab Corporation and an affiliate of Charles Schwab & Co., Inc. Information in this document is subject to change without notice. No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose without the express written permission of Schwab Retirement Technologies, Inc. For further information, contact Schwab Retirement Technologies, Inc. at Ballantyne Corporate Place, Suite 300, Charlotte, NC 28277, USA, Tel: (800) , Web site: SchwabRT.com. Schwab RT Administration Solutions is the property of Schwab Retirement Technologies, Inc., a wholly owned subsidiary of The Charles Schwab Corporation and an affiliate of Charles Schwab & Co., Inc.

3 Contents Table of Contents Table of Contents...3 The Recordkeeping Operations Library...5 Overview of Paperless Transactions...5 Fast Track: Paperless Hardship Withdrawals...6 Recordkeeping Settings (Hardship)...6 Application Administration Settings (Hardship)...7 Participant Request on the Web (Hardship)...8 Fast Track: Paperless Termination Distributions...9 Recordkeeping Settings (Terminations)...9 Application Administration Settings (Terminations)...10 Participant Request on the Web (Terminations)...11 Fast Track: Paperless Loans...12 Recordkeeping Settings (Loans)...12 Application Administration Settings (Loans)...13 Participant Request on the Web (Loans)...14 Common Settings for Paperless Transactions...15 VRS/OPI Setup Options (Plan Maintenance)...15 Spousal Consent Plan Level Options (Plan Maintenance)...17 Spousal Consent Participant Level Options (Participant Maintenance)...18 Spousal Consent on File Options (Participant Maintenance)...19 Configuring Paperless Hardship Withdrawals and Termination Distributions...20 Recordkeeping Options...20 Application Administration Options...28 Requesting Paperless Hardship over the Web...31 Accessing the Paperless Hardship Option...31 Hardship Withdrawal Request Page...32 Request Summary Page (Hardship)...35 Request Confirmation Page (Hardship)...36 Pending Request Page (Hardship)...37 Schwab Retirement Technologies

4 Contents Requesting Paperless Termination Distributions over the Web...38 Accessing the Paperless Distributions Option...38 Distribution Request Page...39 Request Summary Page (Terminations)...46 Request Confirmation Page (Terminations)...47 Pending Request Page (Terminations)...48 Cancellation Confirmation Page (Terminations)...49 Configuring Paperless Loan Transactions...50 Recordkeeping Options...50 Application Administration Options...63 Requesting Paperless Loans Over the Web...64 Payment Calculation and Amortization Schedule...65 Request Summary and Approval...66 Confirmation...67 Pending Activity...68 Appendix A...69 Payroll Calendars...69 Scenario 1: Weekly...70 Scenario 2: Bi-Weekly...71 Scenario 3: Semi-Monthly...72 Schwab Retirement Technologies

5 The Recordkeeping Operations Library The Schwab RT SQL Recordkeeping Operations Library provides you with topic-specific documents available for recordkeeping system processes. Collectively, these documents comprise Schwab RT s Recordkeeping System Manual of modular individual topics that can be individually maintained with current information, for on-demand downloading and printing. Topic-specific documents coordinate with the Recordkeeping online Help system, and overcomes printing limitations with on-line html Help pages. Additional technical setup procedures and tips might be included in topic-specifics documentation that is not pertinent to the on-line Help. If you are new to Schwab RT you may also want to refer to our SQL Plan Setup and Maintenance Application Manual for overviews of many key SQL Recordkeeping concepts and setup options. Overview of Paperless Transactions Loans, lump sum termination distributions, and hardship withdrawals must follow plan rules and adhere to IRS compliance regulations. Requests for paperwork over the Web create delays waiting for forms to be sent and returned through the mail. The paperless process eliminates delays by initiating sales from participant accounts as requests are submitted through the Web. SQL Recordkeeping updates and posts these sales directly from participant accounts. October, 2006 Schwab Retirement Technologies Page 5 of 72

6 Fast Track: Paperless Hardship Withdrawals Fast Track procedures provide a convenient procedural roadmap for configuring paperless options and using them on the participant Web site. For additional details on these procedures, including screen shots and related options, see Paperless Hardship Withdrawal topics later in this document. Recordkeeping Settings (Hardship) Log on to SQL Recordkeeping and complete the following tasks, saving all settings: RK C001 Select Plan Maintenance VRS/OPI Set up Options p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>VRS/OPI Setup Options. 2. Select 42 Paperless Hardship Withdrawal for Web. RK C001 Define Plan Maintenance Distribution Options p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>Distributions. 2. In the Template for Hardship Withdrawal, select a template ID. 3. If the plan has stock investment, select a Stock Payment Method and Management Account. RK C001 Define Spousal Consent Requirement p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>Other Plan Features Cont. 2. If the plan requires it, select the Spousal Consent Required for Withdrawal. RK C004 Select Marital Status p In SQL Recordkeeping, go to Participant Maintenance>Census>Identification. 2. In the Federal Marital Status field, select the participant s marital status. Note: If spousal consent is required and Marital Status is either Married or blank, go to Participant Maintenance>Activity Controls and select Spousal Consent on File for Withdrawals. October, 2006 Schwab Retirement Technologies Page 6 of 72

7 Application Administration Settings (Hardship) Log on to Application Administration and complete the following tasks. ADM Define Reasons for Hardship Withdrawals p In Application Administration, go to System Options >Hardship Reasons. 2. Select the appropriate language, and then click Load. 3. In the Hardship Reason fields, select from the available valid reasons for withdrawal or define new reasons as required. As many as 15 reasons can be defined. 4. Click Update. ADM Enable Confirmation Options p In Application Administration, go to System Options >Confirmation Options. 2. Enable the Hardship Request option. 3. Click Update. ADM Enable Delivery Methods and other Web Options p In Application Administration, go to Plan Options>Environment Options>Web Options. 2. Under Web Options, enable the appropriate Paperless Hardships/Distributions options, shown below: - Enable Check as Delivery Method - Enable ACH as Delivery Method - Enable Wire as Delivery Method - Allow Additional Federal Withholding (Dollar) - Allow Additional Federal Withholding (Percent) - Allow Hardship if Loan Available 3. Click Update. ADM Define Custom Page Content p In Application Administration, go to Web Options>Content Manager. 2. In Content Manager, select the appropriate language, user role (Participant), Web page, and content template. 3. Click Modify Content. The selected application content fields display for modification. 4. Make the necessary changes to the content fields, then click Update. October, 2006 Schwab Retirement Technologies Page 7 of 72

8 Participant Request on the Web (Hardship) Participants log on to Schwab RT Web and perform the following procedures: WEB Request a Paperless Hardship Withdrawal p On the participant home page, select Paperless Hardship from the Plan Services menu. The Withdrawal Request page appears. 2. To make a request, complete the fields under the Withdrawal Request section including the amount, reason, and distribution method. Click Submit Request. The Request Summary page appears. 3. On the Request Summary page, do one of the following: Review the request to verify that the information is correct, and then click I Accept. If the information is not correct, click Change this Hardship Request and return to the Withdrawal Request page, make the necessary modifications, and repeat this step. The confirmation page displays confirmation information and a summary of the pending transaction. The page also includes a cancellation option. WEB Cancel a Paperless Hardship Withdrawal p. 37 To cancel a pending hardship withdrawal request, do one of the following: On the confirmation page that displays at the end of the transaction, click Clear Pending Request. Select Paperless Hardship from the Plan Services menu. On the Pending Request Found page, click Clear Pending Request. Select the Pending Activity option from the main menu, and then click the Cancel link. A page appears, confirming the canceled transaction. October, 2006 Schwab Retirement Technologies Page 8 of 72

9 Fast Track: Paperless Termination Distributions Fast Track procedures provide a convenient procedural roadmap for configuring paperless options and using them on the participant Web site. For additional details on these procedures, including screen shots and related options, see Paperless Termination Distribution topics later in this document. Recordkeeping Settings (Terminations) Log on to SQL Recordkeeping and complete the following tasks, saving all settings: RK C001 Select Plan Maintenance VRS/OPI Set up Options p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>VRS/OPI Setup Options. 2. Select 41 Paperless Termination Distribution for Web. Note: This option requires the participant to have a terminated status code selected in C282/RK SQL System Maintenance, and a termination date on file with no subsequent rehire date. RK C001 Define Plan Maintenance Distribution Options p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>Distributions. 2. If applicable, select the option Purge Loans for Terminated Participants. 3. If the source is not 100% vested, select a Forfeiture Method. If you select Zero the Account or Forfeiture Only, you must also select a Forfeiture Account. 4. If the plan has stock investment, select a Management Account and Stock Payment Method. RK C001 Define Spousal Consent Requirement p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>Other Plan Features Cont. 2. If applicable, select the Spousal Consent Required for Termination Distribution. RK C001 Define Roth 401(k) options, if applicable 1. In SQL Recordkeeping, go to Plan Maintenance>Source Level Settings>Other Source Features and select the Roth Source option. 2. Go to Plan Maintenance>Source Level Settings>General Source Data and select the appropriate Post Tax Type (161 to 170). October, 2006 Schwab Retirement Technologies Page 9 of 72

10 RK C004 Select Marital Status p In SQL Recordkeeping, go to Participant Maintenance>Census>Identification. 2. In the Federal Marital Status field, select the participant s marital status. Note: If spousal consent is required and Marital Status is either Married or blank, go to Participant Maintenance>Activity Controls and select Spousal Consent on File for Distributions. RK C282 Map Termination Status Codes p In SQL Recordkeeping, go to Utilities>RK SQL System Maintenance>Category Setup>Terminated Status Codes Selection. 2. In the Status Codes field, select the appropriate termination status codes. Note: Status codes set here override the Plan Maintenance default status code settings. Application Administration Settings (Terminations) Log on to Application Administration and complete the following tasks. ADM Enable Confirmation Options p In Application Administration, go to System Options >Confirmation Options. 2. Enable the Termination Distribution option. 3. Click Update. ADM Enable Delivery Methods and other Web Options p In Application Administration, go to Plan Options>Environment Options>Web Options. 2. Under Web Options, enable the appropriate Paperless Hardships/Distributions options, shown below: - Enable Check as Delivery Method - Enable ACH as Delivery Method - Enable Wire as Delivery Method - Allow Additional Federal Withholding (Dollar) - Allow Additional Federal Withholding (Percent) 3. Click Update. ADM Define Custom Page Content p In Application Administration, go to Web Options>Content Manager. 2. In Content Manager, select the appropriate language, user role (Participant), Web page, and content template. 3. Click Modify Content. The selected application content fields display for modification. 4. Make the necessary changes to the content fields, then click Update. October, 2006 Schwab Retirement Technologies Page 10 of 72

11 Participant Request on the Web (Terminations) Participants log on to Schwab RT web and perform the following procedures: WEB Request a Paperless Termination Distribution p On the participant home page, select Paperless Distribution from the Plan Services menu. The Distribution Request page appears. 2. To make a request, complete the fields under the Distribution Request section including the rollover options and distribution method. Click Submit Request. The Request Summary page appears. 3. On the Request Summary page, do one of the following: Review the request to verify that the information is correct, and then click I Accept. If the information is not correct, click Change this Distribution Request and return to the Distribution Request page, make the necessary modifications, and repeat this step. The confirmation page displays confirmation information and a summary of the pending transaction. The page also includes a cancellation option. WEB Cancel a Paperless Termination Distribution p. 49 To cancel a pending distribution request, do one of the following: On the confirmation page that displays at the end of the transaction, click Clear Pending Request. Select Paperless Distribution from the Plan Services menu. On the Pending Request Found page, click Clear Pending Request. Select the Pending Activity option from the main menu, and then click the Cancel link. A page appears, confirming the canceled transaction. October, 2006 Schwab Retirement Technologies Page 11 of 72

12 Fast Track: Paperless Loans Fast Track procedures provide a convenient procedural roadmap for configuring paperless options and using them on the participant Web site. For additional details on these procedures, including screen shots and related options, see Paperless Loan topics later in this document. Recordkeeping Settings (Loans) Log on to SQL Recordkeeping and complete the following tasks, saving all settings: RK C001 Select Plan Maintenance VRS/OPI Set up Options p In Plan Maintenance, ensure that loan hierarchies are set up under Source Level Settings>Distribution Specifications and Investment Level Settings>Investment Controls. 2. In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>VRS/OPI Setup Options and select 43 Paperless Loans for Web. Note: The recordkeeper should have a blanket loan authorization on file from the plan sponsor before selecting this option. RK C001 Define Plan-Level Prime Rate Settings p In SQL Recordkeeping, go to Plan Maintenance> Loan Parameters>Default Settings. 2. Complete the appropriate fields: Interest Rate, Default Repayment Cycle, Stock Management Account, Interest Base, and Interest Begin Date. RK C001 Select Status Codes for Paperless Loans p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>VRS/OPI> Paperless Options. 2. Select the appropriate Status Codes to indicate which are eligible for paperless loan applications on the Web. RK C001 Define Spousal Consent Requirement p In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>Other Plan Features Cont. 2. If the plan requires it, select the Spousal Consent Required for Loan. Note: If spousal consent is required and Marital Status is either Married or blank, go to Participant Maintenance>Activity Controls and select Spousal Consent on File for Loans. October, 2006 Schwab Retirement Technologies Page 12 of 72

13 RK C001 Assign Loan IDs p In SQL Recordkeeping, go to Plan Maintenance>Loan Parameters>Plan Level Controls Cont. 2. Under Loan ID Assignment, select the appropriate Loan ID format. RK C282 C001 Define Payroll Frequency by Division Code p In SQL Recordkeeping, go to RK SQL System Maintenance>General System Options, set Payroll by Division to In SQL Recordkeeping, go to Plan Maintenance>Plan Level Settings>Payroll Cycles. 3. Define the participant s payroll frequency. RK C282 Define Global Prime Rate Settings p In SQL Recordkeeping, go to Utilities>RK SQL System Maintenance>Process Setup>Loan>Loan Parameters. 2. In the Advance First Payment field, enter the number of days to elapse between the loan request date and the date that the first payment is due. 3. Define the global Prime Interest Rate for General loans. Note: Residential loans are not currently available through the paperless request process. RK C004 Select Marital Status p In SQL Recordkeeping, go to Participant Maintenance>Census>Identification. 2. In the Federal Marital Status field, select the participant s marital status. Application Administration Settings (Loans) Log on to Application Administration and complete the following tasks. ADM Define Custom Page Content p In Application Administration, go to Web Options>Content Manager. 2. In Content Manager, select the appropriate language, user role (Participant), Web page, and content template. 3. Click Modify Content. The selected application content fields display for modification. 4. Make the necessary changes to the content fields, then click Update. October, 2006 Schwab Retirement Technologies Page 13 of 72

14 ADM Show Amortization Schedule p In Application Administration, go to System Options> System Options. 2. If you want a full amortization schedule to display on the participant loan request page, select the Show Amortization Schedule for loans option. 3. Click Update. ADM Enable Confirmation Options p In Application Administration, go to System Options >Confirmation Options. 2. Enable the Loan Request option. 3. Click Update. Participant Request on the Web (Loans) Participants log on to Schwab RT web and perform the following procedures: WEB Request a Paperless Loan p On the participant home page, select Paperless Loan from the Plan Services menu. The Loan Request page appears. 2. On the Loan Modeling/Request page, complete the fields for the loan type, term, amount, and cycle (if applicable), then click Calculate. The system calculates payments for the modeled loan and displays the resulting information at the bottom of the page. The amortization schedule also appears, if that option is selected. 3. To proceed with the loan request, click Request Loan. The Request Summary page appears. 4. On the Request Summary page, do one of the following: Review the request to verify that the information is correct, and then click I Accept. If the information is not correct, click Change Your Request and return to the Loan Request page, make the necessary modifications, and repeat this step. The confirmation page displays confirmation information and a summary of the pending transaction. The page also includes a cancellation option. WEB Cancel a Paperless Loan p. 68 To cancel a pending loan request, do one of the following: On the confirmation page that displays at the end of the transaction, click Clear Pending Request. Select Paperless Loan from the Plan Services menu. On the Pending Request Found page, click Clear Pending Request. Select the Pending Activity option from the main menu, and then click the Cancel link. A page appears, confirming the canceled transaction. October, 2006 Schwab Retirement Technologies Page 14 of 72

15 Common Settings for Paperless Transactions VRS/OPI Setup Options (Plan Maintenance) Plan level settings in Plan Maintenance under VRS/OPI Setup Options are used to indicate which plans offer paperless functionality through the Web. The Web determines which participants are eligible for hardship withdrawals, termination distributions, or loans based on status codes, termination/rehire dates, and account balances. Note that paperless options are available only for Web and cannot be selected for VRS or Customer Service use. Option 41 Paperless Termination Distribution Requires participant to have a terminated status code as selected within the C282/RK SQL System Maintenance application as well as termination date on file, with no subsequent rehire date. When Option #41 is selected from VRS/OPI Setup Options, forfeiture data must be selected from the Plan Level Settings>Distributions window. Since the system cannot determine if sources are 100% vested, a forfeiture method must be selected. If Zero the Account (default) or Forfeiture Only is selected, a forfeiture account must be defined. If the plan has stock investments, you must select a Stock Management Account and Stock Payment Method. October, 2006 Schwab Retirement Technologies Page 15 of 72

16 Option 42 Paperless Hardship Withdrawal When selected, the Withdrawal Template for Paperless Hardship field on the Distributions window must be populated with a template ID. If the plan has stock investments, select a Stock Management Account and a Stock Payment Method. Option 43 Paperless Loans Before selecting this option, ensure that loan hierarchies are set up under Source Level Settings>Distribution Specifications and Investment Level Settings>Investment Controls. Paperless loan processing uses the hierarchical specification method, even if the manual specification method is selected in Plan Maintenance. Some plan sponsors require that they approve all plan loans. With the paperless loan process, a blanket loan authorization is held on file, authorizing recordkeepers to process paperless loans requested by participants. Participants are directed to a link to apply for a paperless loan. It is the plan sponsor s responsibility to provide current census updates so that the recordkeeper is aware of recent terminations or rehires. The interest rate can be based on the prime rate set at the global or other level, or the plan level. Settings for Global Prime Rates (RK SQL System Maintenance) and Plan-Level Prime Rates (Plan Maintenance) are covered later in this document. Payroll By Division should be set to 1 in RK SQL System Maintenance>System Settings so that the participant s division code determines the payroll frequency for the paperless loan process. Manual overrides are permitted. In Plan Maintenance>Plan Level Settings>VRS/OPI Paperless Options, select the appropriate Status Codes to indicate which are eligible for paperless loan applications. Note: If you trade with the Charles Schwab Trust Company, you can offer paperless loans. The Trust provides all paperless loan and Truth-in-Lending verbiage right on the check. At a plan level, all of these paperless processes are exclusive of manual request processes. Options initiate the actual transactions through the Web in contrast to other options which pertain only to requests for paperwork. No paperless options are selected by default. When spousal consent is required by the plan and the participant is married, the system checks settings in Participant Maintenance to verify that spousal consent is on file. If spousal consent is required but not on file, withdrawal transactions can proceed by overriding a warning message in C090/Lump Sum Distributions, C091/In-Service Withdrawal, and C150/ADT. Processing will not proceed on the Web in these cases. October, 2006 Schwab Retirement Technologies Page 16 of 72

17 IMPORTANT NOTE: When adding a new plan in Plan Maintenance, do not select paperless settings in the VRU/OPI settings. These settings usually require a hardship template, forfeiture account, and stock management account before using these settings. Until these have been created, you will not be able to save a plan if you attempt to first select these settings. Paperless settings are viewable in C070/Plan Inquiry, reported on the CP07/Plan Digest report, and tracked in C076/Activity Tracking. Spousal Consent Plan Level Options (Plan Maintenance) The Other Plan Features Cont. tab in Plan Maintenance includes plan level Spousal Consent options that affect Paperless Hardship Withdrawals, Loans, and Termination Distributions. Spousal consent requirements are set in this window (SQL mode plans only), but are not available at the source level. These requirements are not selected by default. The C091/In-Service Withdrawal and C090/Lump Sum Distribution applications read these fields to determine if a plan requires spousal consent and if ineligible, a warning message appears (which can be overridden). In C552/VRS/OPI Update and C150/ADT, withdrawals also read these fields. See also the Participant level spousal consent requirements on the following page. Spousal Consent Required for Loan Spousal Consent Required for Withdrawal Spousal Consent Required for Termination Distribution October, 2006 Schwab Retirement Technologies Page 17 of 72

18 Spousal Consent Participant Level Options (Participant Maintenance) To bypass spousal consent requirements for unmarried participants, the paperless transaction process checks the Federal Marital Status field in Participant Maintenance. (The State Marital Status field is not used for this purpose.) If S: Single or H: Head of Household is selected, then the participant is considered single and spousal consent is not required. If Married or NA is selected, then the participant is considered married and spousal consent is required. If the field is blank, spousal consent is required. On the Web and in ADT Financial, if spousal consent is required by the plan AND the participant s federal marital status is Married, N/A, or blank, then the Spousal Consent on File option in Participant Maintenance must be selected (see the following page). October, 2006 Schwab Retirement Technologies Page 18 of 72

19 Spousal Consent on File Options (Participant Maintenance) Options in Participant Maintenance on the Activity Controls window indicate whether the spousal consent is on file for participant distributions. C091/Inservice Withdrawal, C090/Lump Sum Distribution, C150/ADT, and C552/VRS/OPI Update applications read these fields to determine if a plan requires spousal consent for a withdrawal or distribution eligibility. If not eligible, a warning message appears that the user can override in C090 and C091. These settings are reported on the CP23/Utility Reporting Participant Master and in C076/Activity Tracking. If spousal consent is required, based on the setting in Plan Maintenance, the following Spousal Consent On File options are used to indicate whether consent forms are on file: For Loan For Withdrawals (used for Hardship) For Distributions (used for Terminations) October, 2006 Schwab Retirement Technologies Page 19 of 72

20 Configuring Paperless Hardship Withdrawals and Termination Distributions Recordkeeping Options Notes: Paperless features are available only with SQL-mode plans and only through Web. Also refer to the status code setting information for C282/RK SQL System Maintenance. Participants are directed to a link to apply for a paperless hardship or termination distribution. Paperless hardships use the hierarchical specification method, even if the manual specification method is selected in Plan Maintenance. The paperless distribution process does not store a setting for "Final Accrued Income Payout Method" so the accrual amount is not affected. System functionality includes: The following transaction types (Vprtpnd file): - Operator type VprtPnd SSN [1-3] - Operator IDB starting at 4 in SSN (used to look up the Financial Advisor Name) Transaction types affect the following applications as follows: C557/Customer Service The Pending Activity window displays transaction types of VRS/OPI terminated distributions, includes transaction types and VRS/OPI Hardship information. C258/VRS/OPI Interface Detail Report The report prints the transaction types for Paperless Termination Distributions and Paperless Hardship Withdrawals. C259/VRS/OPI Customer Inquiry The application displays these transaction types. Distribution batches are created through the C552/Update module. Origin codes reflect hardship or termination distributions from C552/Update. The LDT file includes these transactions. Distribution Codes The distribution code assigned to all termination distributions and hardship withdrawals is 1 with the following exceptions: Participant is over age 59-1/2, in which case distribution code 7 is assigned. Participant selects Rollover to an IRA or Another Plan as the Distribution Method for termination distributions on the Web, in which case distribution code G is assigned. If both a G and a 7 are appropriate, then distribution code G is assigned. Web setting requirements are discussed in the following pages. October, 2006 Schwab Retirement Technologies Page 20 of 72

21 The Distributions Window in C001/Plan Maintenance The Template for Hardship Withdrawal and Forfeiture Method fields are located in Plan Maintenance on the Distributions window. The following field descriptions outline their effect on the paperless distribution process. October, 2006 Schwab Retirement Technologies Page 21 of 72

22 Distributions Window Field Definitions The following table identifies and describes the fields associated with the Distributions window: Field Name Template for Hardship Withdrawals Purge Loans for Terminated Participants Definition When option #42 Paperless Hardship Withdrawal is selected from the VRS/OPI Setup Options tab, this field must be populated with a template ID. For use during the release process, select this check box to purge loans for participants that have a terminated status code as selected in C282/RK SQL System Maintenance. When releasing transactions for termination distributions, this deletes the loan records, and amortization schedule for that participant, although the transaction history remains. The Release application purges certain OPI files if a Lump Sum is processed based on the System Settings in C282/RK SQL System Maintenance setting for Purge VPRT information. The module checks the Loan Payment File (LPF) records for that participant and sets them all as true. Next payment is set to the amount remaining to be paid and all other loan payment records are set as paid, with amounts of zero. The loan fields (LON) for principal and interest paid are also updated. This is what occurs if the Purge Loans for Terminated Participants setting is not selected. If the Purge Loans for Terminated Participants setting is selected, instead of updating the LPF and LON fields, those records for that participant are deleted. Transaction history remains after using this option. Forfeiture Data Forfeiture Methods Forfeiture Account When Option 41 Paperless Termination Distribution is selected from VRS/OPI Setup Options, forfeiture data must be selected. If Zero the Account (default) or Forfeiture Only, are selected, a forfeiture account must also be defined. Select the appropriate Forfeiture Account from this field. Stock Data Stock Payment Method Management Account When Option is selected from the VRS/OPI Setup Options, a stock payment method is required if the plan has a stock investment. Select Payout in Cash and/or Payout in Shares to designate how the stock should be paid out to the participant. Select the appropriate Stock Management Account from this field. October, 2006 Schwab Retirement Technologies Page 22 of 72

23 Impact on Other Applications Following describes how additional applications are affected by Participant Maintenance settings related to paperless transactions: C076/Activity Tracking CP23/Utility Report C150/ADT ADTSYN C552/VRS/OPI Update VPRTPND Specifications for all Transaction types of Paperless Distributions 967 FEDERAL MARITAL STATUS 968 STATE MARITAL STATUS Both marital status settings are printed on the Participant Master Report. Data elements include Status and Dates data types for federal and state marital status. Spousal Consent Data Elements: 670 Spousal consent for loans 671 Spousal consent for termination distributions 672 Spousal consent for hardship withdrawals Reads marital status in lower as well as upper case. Spousal consent checks to determine participant marital status. For Paperless Termination Distribution - Vprtpnd.TranType = 37 ORIGIN = 598 For Paperless Hardship - Vprtpnd.TranType = 38 ORIGIN = 597 Recordkeeping Default settings When a Plan ID is entered in the Process Setup window in Lump Sum Distributions, the Forfeiture Data and Stock Data fields automatically populate with default entries based on settings in Plan Maintenance: October, 2006 Schwab Retirement Technologies Page 23 of 72

24 In-Service Withdrawal default settings are also entered in the Template ID and Stock Data fields: In C094/Withdrawal Template Maintenance as you maintain a Template ID, the Management Account field for new templates defaults to the setting in Plan Maintenance: October, 2006 Schwab Retirement Technologies Page 24 of 72

25 On the Distributions window in C150/ADT, defaults appear in the Forfeiture Account and Management Account fields, based on settings in Plan Maintenance: October, 2006 Schwab Retirement Technologies Page 25 of 72

26 Distributions Window in C552/VRS/OPI Update Tabs on the Lump Sum window in C552/VRS/OPI Update store tax codes to be used for vested Payout, Forfeited, and Stock transactions. Payout Tab October, 2006 Schwab Retirement Technologies Page 26 of 72

27 Forfeiture Payout Tab Stock Tab October, 2006 Schwab Retirement Technologies Page 27 of 72

28 Application Administration Options The Application Administration console provides the following options for configuring paperless hardships and termination distributions. Defining Reasons for Hardship Withdrawals When requesting a paperless hardship withdrawal over the Web, the participant can select from a list of reasons for making the withdrawal. These withdrawal reasons are defined at the system level in the Application Administration console. To define paperless hardship withdrawal reasons: 1. Log on to Application Administration. 2. From the System Options menu, select Hardship Reasons. 3. Select the appropriate language and click Load. 4. In the Hardship Reason fields, type the valid reasons for withdrawal. As many as 15 reasons can be defined. 5. Click Update. October, 2006 Schwab Retirement Technologies Page 28 of 72

29 Enabling Confirmation Options If you want to provide confirmation numbers for paperless distributions, you must enable the corresponding confirmation options in the Application Administration console. To enable confirmation options: 1. Log on to Application Administration. 2. From the System Options menu, select Confirmation Options. 3. Enable the options Hardship Request and Termination Distribution. 4. Click Update. Note: These confirmation options are also used for traditional paper-based hardship withdrawals, loan requests, and termination distributions. October, 2006 Schwab Retirement Technologies Page 29 of 72

30 Enabling Delivery Methods and Other Web Options You can use plan-level Web options to specify which distribution methods (check, wire, and ACH) the participant can choose from when requesting a paperless hardship or termination distribution. Web options also let you define whether the participant can request additional federal withholding, and whether to allow hardship withdrawals if a loan is currently available. To enable Web Options for paperless hardships and distributions: 1. Log on to Application Administration. 2. From the Plan Options menu, select View/Update Options. 3. Select a plan or plans. Click Add, and then click Continue. 4. Under Plan Options, on the Environment Options line, click Edit. 5. Under Web Options, enable the appropriate Paperless options, shown below. 6. Click Update. Defining Page Content To define page content for paperless distribution pages on the Web: 1. From the Web Options menu, select Content Manager. 2. In the Content Manager fields, select the appropriate language, user role (Participant), Web page, and content template. 3. Click Modify Content. The selected application content fields display for modification. 4. Make the necessary changes to the content fields and click Update. October, 2006 Schwab Retirement Technologies Page 30 of 72

31 Requesting Paperless Hardship over the Web To make paperless hardship withdrawals available over the Web, the following conditions must be met: SQL Recordkeeping, Plan Maintenance VRS/OPI Setup option 42 Paperless Hardship Withdrawals is enabled for the Web. Participant is not terminated, as defined in Recordkeeping. If participant has a loan available, the option Allow Hardship if Loan Available is enabled in Application Administration. SQL Recordkeeping spousal consent requirements are fulfilled. Notes: A hardship is not an eligible rollover distribution; therefore a rollover to an IRA or another plan is not an option. An IRS distribution code of 1 is assigned for all hardship distributions, unless the participant is over age 59½, in which case an IRS distribution code of 7 is assigned. If a participant has a pending transfer, realignment, or paperless loan, then the participant may not process a paperless hardship withdrawal request. Accessing the Paperless Hardship Option The Paperless Hardship menu option appears on the Plan Services menu on the Web, as shown below. The Paperless Hardship option is added to the Charles Schwab Default (SRT) template by a seed script during new installations beginning with Release 2.1. If the Paperless Hardship option does not automatically appear on the menu, you can add it to the menu using the pre-defined menu element in Menu Manager. Note: If you elect to offer traditional paper-based hardship withdrawals to your participants, you will continue to use the existing Withdrawal Request menu option. Please note that, beginning with Release 2.1, Menu Manager s pre-defined element Link URL for this option has changed to /srtweb/web_withdrawal.aspx. During installation, the new URL will overwrite the current URL in the Charles Schwab Default template and in any custom template that derives its values from the Charles Schwab Default template. October, 2006 Schwab Retirement Technologies Page 31 of 72

32 Hardship Withdrawal Request Page The Withdrawal Request page appears when the participant selects the Paperless Hardship option from the Web menu. To make a request, the participant completes the fields under the Withdrawal Request section and clicks Submit Request. For more information on these fields, see Field Definitions. October, 2006 Schwab Retirement Technologies Page 32 of 72

33 Field Definitions The key input fields on the Withdrawal Request page are defined below: Field Name Withdrawal Amount Federal Withholding Reason for Withdrawal Distribution Method Definition Participant enters dollar amount of the requested hardship withdrawal. This field is required. Participant enters amount of Federal wages to be withheld. Value can be expressed as dollars or percent, as defined by Plan-level Web Option in the Application Administration console. In the example above, the participant can choose the desired option. If the participant is restricted to either dollar or percent amount, the appropriate sign will appear in the field names. The standard withholding amount for a hardship withdrawal is 10%. This percentage is not an option in Schwab RT Recordkeeping so the federal withholding for a hardship withdrawal defaults to 0%. It is recommended that federal tax withholding be addressed in the hardship withdrawal paperwork available for viewing by participants. The participant selects a reason from a list of possible reasons defined by the System Options/Hardship Reasons in the Application Administration console. If one or more reasons are defined, then this field is required. If no reasons are defined, this field will not be shown to the participant. Participant selects from a list of distribution methods defined by Plan-level Web Options in the Application Administration console. This is a required field. Depending on the method selected, additional supporting fields appear on the page, as described below: Amount paid via check October, 2006 Schwab Retirement Technologies Page 33 of 72

34 Distribution Method (cont.) Amount paid via ACH Account Number is a required field with a maximum length of 17 alphanumeric characters. Routing Number is the same as the ACH Transit Number field in SQL Recordkeeping. This is a required field with a maximum length of nine numeric characters. Stock Payout Method is based on fields updated in Plan Maintenance, Distribution page. This option appears only if the plan has stock. If one option is checked, Stock Payout Method will not show and the request will process with the method selected in Plan Maintenance. Amount paid via Wire Note: These fields are identical to the fields for the ACH method. October, 2006 Schwab Retirement Technologies Page 34 of 72

35 Request Summary Page (Hardship) When the participant submits the hardship request, the system displays a summary of the request. After reviewing the request to verify that the information is correct, the participant clicks I Accept. If the information is not correct, the participant can click the link Change this Hardship Request and return to the Withdrawal Request page and make the necessary modifications. October, 2006 Schwab Retirement Technologies Page 35 of 72

36 Request Confirmation Page (Hardship) After submitting the hardship request, the system returns a confirmation page, shown below. To provide confirmation information for paperless hardship withdrawals, you must enable the corresponding confirmation options in the Application Administration console. October, 2006 Schwab Retirement Technologies Page 36 of 72

37 Pending Request Page (Hardship) While a hardship request is pending, a pending request page appears when the participant selects the Paperless Hardship option from the menu. The participant can cancel the request by clicking Clear Pending Request. Note: Pending hardship requests can also be viewed and canceled by selecting the Pending Activity option from the menu. October, 2006 Schwab Retirement Technologies Page 37 of 72

38 Requesting Paperless Termination Distributions over the Web To make paperless termination distributions available over the Web, the following conditions must be met: SQL Recordkeeping, Plan Maintenance VRS/OPI Setup option 41 Paperless Termination Distribution is enabled for the Web. Participant has a terminated status code as defined in C282/RK SQL System Maintenance AND has a termination date on file but not a subsequent rehire date. SQL Recordkeeping spousal consent requirements are fulfilled. Notes: An IRS distribution code of 1 is assigned for all termination distributions except in the following cases: If the participant is over age 59½, an IRS distribution code of 7 is assigned. If the participant elects a rollover, an IRS distribution code of G is assigned. If both distribution codes 7 and G are appropriate, then G is assigned. If a participant has a pending transfer, realignment, or paperless loan, then the participant may not process a paperless distribution request. If the participant has a zero vested balance, Paperless Distribution does not appear on the menu. Accessing the Paperless Distributions Option The Paperless Distribution option appears on the Plan Services menu on the Web, as shown below. If the Paperless Distribution option does not automatically appear on the menu, you can add it to the menu using the pre-defined menu element in Menu Manager. October, 2006 Schwab Retirement Technologies Page 38 of 72

39 Distribution Request Page The Distribution Request page appears when the participant selects the Paperless Distribution option from the Web menu. The Distribution Request options can include pre-tax, after-tax, and Roth rollovers, if applicable for an account. The balances remaining in the account at the time of termination must be rolled over or taken as a distribution. The participant can select any or all of the rollover options. Money that is not rolled over must be taken as a distribution, using the chosen distribution method (check, wire, or ACH). If all three rollover options are selected, no distribution is available because all money will be rolled over. After selecting the appropriate rollover options, and indicating the preferred method of distribution for any money not being rolled over, the participant clicks Submit Request. For more information on these fields, see Field Definitions. October, 2006 Schwab Retirement Technologies Page 39 of 72

40 When you select a rollover option, a set of fields appears where you can enter transfer information for the institution that will receive the rollover. In the following example, only the Rollover Pre-Tax option is selected. That means that the after-tax and Roth balances will be distributed according to the distribution method selected. Example 1: Rollover: Pre-tax transferred to First Bank Distribution: After-tax and Roth paid to participant checking account via ACH. October, 2006 Schwab Retirement Technologies Page 40 of 72

41 In the next example, both pre-tax and after-tax balances are rolled over to the same institution, with Roth proceeds paid directly to the participant by check. For convenience, you can copy identical banking information from one type of rollover to another by selecting the Use Rollover Pre-Tax Information check box. Example 2: Rollover: Pre-tax and after-tax transferred to First Bank. Distribution: Roth paid by check to participant. October, 2006 Schwab Retirement Technologies Page 41 of 72

42 In this final example, the participant has selected all three rollover options. Since all money is rolled over, no proceeds are paid to the participant. Example 3: Rollover: Pre-tax and after-tax transferred to First Bank; Roth transferred to Second Bank. Distribution: Not applicable; no proceeds paid to participant. October, 2006 Schwab Retirement Technologies Page 42 of 72

43 Rollover Options (Field Definitions) The following table identifies and describes the fields associated with the three rollover options. Field Name Rollover Pre-Tax Rollover After-Tax Rollover Roth Rollover Institution Name Rollover Account Number Institution Street Address 1 Institution Street Address 2 Institution City Institution State Institution Zip Code Use Distribution Rollover Information Definition Select to rollover pre-tax balance to the designated financial institution. If not selected, proceeds are paid to participant according to instructions in the Distribution Method field. Select to rollover after-tax balance to the designated financial institution. If not selected, proceeds are paid to participant according to instructions in the Distribution Method field. Select to rollover Roth balance to the designated financial institution. If not selected, proceeds are paid to participant according to instructions in the Distribution Method field. Name of rollover institution. (Required field, 30 characters). Account number used for rollover transfer. (Required field, 15 characters) Primary street address of rollover institution. (30 characters) Secondary street address of rollover institution. (30 characters) City where rollover institution is located. (30 characters) State where rollover institution is located. (2 character state abbreviation) Postal ZIP code of rollover institution location. (10 characters) Select this check box to copy the information entered in the Rollover Pre- Tax fields for the corresponding rollover option. October, 2006 Schwab Retirement Technologies Page 43 of 72

44 Distribution Method Options (Field Definitions) The following table identifies and describes the fields associated with the Distribution Method for Proceeds Paid to You field. Amount paid via ACH Distributes proceeds (total amount not rolled over) to designated bank through Automated Clearing House (ACH) electronic transfer. Field Name Additional Federal Withholding Account Number Routing Number Stock Payout Method Definition Paperless distributions automatically calculate 20% federal withholding. The participant can elect to withhold an additional amount or percent, if this option is permitted at the plan level. The value can be expressed as dollars or percent, as defined in the Application Administration console (Plan Options>Environment Options>Web Options>Paperless Hardships/Distributions). If both dollar and percent options are enabled, the participant can choose the desired option. If the participant is restricted to either dollar or percent amount, the appropriate sign ($ or %) appears in the field name. Required field, maximum length of 17 characters. Same as the ACH Transit Number field in SQL Recordkeeping. Required field with a maximum length of nine numeric characters, and no dashes. Based on fields updated in Plan Maintenance, on the Distributions page. This option appears only if the plan has stock. October, 2006 Schwab Retirement Technologies Page 44 of 72

45 Amount paid via Wire Distributes proceeds (total amount not rolled over) to the designated bank by wire transfer. The fields for this option are identical to those for the option Amount paid via ACH. Amount paid via check Distributes proceeds (total amount not rolled over) directly to participant by check. October, 2006 Schwab Retirement Technologies Page 45 of 72

46 Request Summary Page (Terminations) When the participant submits the distribution request, the system displays a summary of the request. After reviewing the request to verify that the information is correct, the participant clicks I Accept. If the information is not correct, the participant can click Change this Distribution Request and return to the Distribution Request page and make the necessary modifications. October, 2006 Schwab Retirement Technologies Page 46 of 72

47 Request Confirmation Page (Terminations) After submitting the distribution request, the system returns a confirmation page, shown below. To provide confirmation information for paperless distributions, you must enable the corresponding confirmation options in the Application Administration console. October, 2006 Schwab Retirement Technologies Page 47 of 72

48 Pending Request Page (Terminations) While a distribution request is pending, a pending request page appears when the participant selects the Paperless Distributions option from the menu. The participant can cancel the request by clicking Clear Pending Request. October, 2006 Schwab Retirement Technologies Page 48 of 72

49 Pending distribution requests can also be viewed and canceled by selecting the Pending Activity option from the menu. Cancellation Confirmation Page (Terminations) When a participant clears a pending request, the following confirmation page appears. October, 2006 Schwab Retirement Technologies Page 49 of 72

50 Configuring Paperless Loan Transactions Recordkeeping Options Note: Paperless loans are available only with SQL-mode plans. Retirement plans that allow participant loans must adhere to plan rules and IRS rules regarding the amount eligible for a loan, the loan term, repayment frequency, and the interest rate. Previously, a participant could request loan application paperwork through the Web site and then complete and return the required paperwork to the recordkeeper for processing a process that delays receipt of the loan check by several days. In contrast, the paperless process directly initiates the sale from the participant s account when the participant submits the request through the Web. This eliminates delays involved in signing and mailing out paperwork. The Web request is updated in Recordkeeping and sales are then posted directly from the participant s account. Some plan sponsors require that they approve all plan loans. With the paperless loan process, a Blanket Loan Authorization signed by the plan sponsor is held on file, authorizing recordkeepers to process paperless loans requested by participants. Participants are directed to a link to apply for a paperless loan. It is the plan sponsor s responsibility to provide current census updates so that the recordkeeper is aware of recent terminations or rehires. If you trade with Schwab Trust, you can sign up to offer paperless loans. Schwab Trust includes all appropriate paperless loan and Truth-in-Lending verbiage right on the check. With the 2.0 release of SQL Recordkeeping, the paperless process is available in conjunction with the release of Schwab RT Web 2.0. Paperless loan processing uses the hierarchical specification method, even if the manual specification method is selected in Plan Maintenance. When a loan request is submitted through Loan Maintenance, Loan Consolidation, ADT, Web, Voice or Call Center, the loan parameters listed below are set as follows: Interest rate The interest rate is based on the prime rate set at the global-level or other level (in C282/RK SQL System Maintenance) or can optionally be set at a plan level. Loan Maintenance, Loan Consolidation and ADT pull the interest rate into the application, although this rate can be overridden, unless using the paperless process. Refer to the section on Global-Level Prime Rate Settings on the next page of this document. Loan ID The loan ID is set using the loan ID naming convention set in Plan Maintenance and the Last Loan ID Counter field in Participant Inquiry (refer to page 28). Manual override is permitted in the Loan Maintenance, Loan Consolidation, and ADT applications. Payroll frequency Payroll By Division should be turned on through the C282/RK SQL System Maintenance application so that the participant s division code can determine the frequency for the paperless loan process. Manual override is permitted in the Loan Maintenance, Loan Consolidation, and ADT applications. Refer to the previous section on Payroll by Division and Payroll Calendars in the Appendix. First payment date The first payment date is based on the payroll frequency, payroll calendar, and the global-level Advance First Payment Date settings. Manual override is permitted in the Loan Maintenance, Loan Consolidation, and ADT applications. October, 2006 Schwab Retirement Technologies Page 50 of 72

51 Note: Refer to the Common Settings for Paperless Transactions covered earlier in this document. Also, Option 12 (Loan Modeling) must be selected for paperless loans to be available. Global-Level Prime Rate Settings in C282/RK SQL System Maintenance In conjunction with Paperless Loan functionality, the following global-level interest rate settings are located under Utilities in the C282/RK SQL System Maintenance application Loan Parameters window. At one time, the interest rate was set at the plan-level in Plan Maintenance under Loan Parameters/Default Settings so that whenever the prime interest rate changed, the recordkeeper had to change the interest rate for each plan. You can now set prime rates globally. Depending on the plan settings, no change (other than Prime) may be required. The Advance First Payment field is a global setting for the paperless loan process. It determines how far in advance the first payment is set. Enter from 0-60 days in this field. Example: If the global setting is 30 days, the first payment date is set at least 30 days ahead of the date that the loan is being requested. The first payment date also coincides with a date on the payroll calendar. If a participant has a semi-monthly payroll frequency and requests a loan on 1/6/07, then the first payment date is set for the next payroll after 30 days so that the participant s first payment date is 2/15/07. Once entering a value in the Advance First Payment field, the Prime rates must also be set on this window (global level) for both General and Residential loans through the Prime Interest Rate fields. (You can enter 0-100%). Residential Loans are not available through the paperless process at this time. October, 2006 Schwab Retirement Technologies Page 51 of 72

52 If global settings are not entered in the Loan Parameters window, the paperless process will use a zero value for all fields. For example, if the interest rate option in Plan Maintenance is selected as Prime + 0.5%, the system will use 0.5 as the interest rate ( %). Also, if you do not enter an Advance First Payment setting, the system might calculate a first payment date as early as tomorrow since a value of 0 means 0 days for advancement. Therefore, once you enter the Advance First Payment days, you must also enter the Prime Interest Rates in this window. October, 2006 Schwab Retirement Technologies Page 52 of 72

53 Plan-Level Prime Rate Settings Options on the Default Loan Settings windows in Plan Maintenance allow setting plan-level prime rate settings, which can be viewed in Plan Inquiry. These fields must be completed in Plan Maintenance when option 43 Paperless Loans is selected in VRS/OPI Setup options. October, 2006 Schwab Retirement Technologies Page 53 of 72

54 Field Definitions The following table identifies and describes critical fields associated with the Default Loan Settings window. Field Name Interest Rates Default Repayment Cycle Stock Management Account Definition Plan-level prime interest rate options allow different rates for general loans and residential loans. However, paperless loans are not available with residential loans. The default setting for Other will be the plan s current interest rates. If Other is selected, the percentage you enter is used and a global-prime rate is not used. The format for the Other interest rate is ##.##% (Example: 06.25%). (See notes below) Select the appropriate default cycle This field entry is required for plans that include stock. Interest Base (360 or 365 days) Usually keep the default selection, 360. Interest Begin Date (First Payment or Origination) Notes: These interest rate options are also added to C210/Loan Utilities. Use the default selection (First Payment) because paperless loans always use the interest from the first payment logic in the calculations on the Schwab RT Web. The prime rate set at the global level and these plan-level interest rate settings determine the rates used for loans originated through C201/Loan Maintenance, C206/Loan Consolidation, C150/ADT, Web, Voice, and Call Center. Calculations for the payment amount and the estimated amortization schedule that display on the Web do not determine interest amounts from the origination date. Select global prime interest rates in the C282/System Maintenance application under Loan Parameters. October, 2006 Schwab Retirement Technologies Page 54 of 72

55 Plan Maintenance/Paperless Settings Tab The following Paperless Settings tab on the Plan Maintenance>VRS/OPI window allows you to select or clear appropriate Status Codes Eligible for Paperless Loans. No status codes are selected by default. You can use the Select All or Clear All buttons to facilitate your selection process. The Status Codes Eligible for Paperless Loans selections apply to participants who go through the process of requesting a loan. Modeling using the paperless loan process can be done by a participant with any status code. October, 2006 Schwab Retirement Technologies Page 55 of 72

56 Assigning Loan IDs Options for assigning loan IDs appear under the Loan Parameters/Plan Level Controls window in Plan Maintenance: One of the four Loan ID Assignment options must be selected. Incremented Numerically (default) 001, 002, 003. A participant taking the first loan is assigned loan ID 001, then 002, 003, etc. SSN + Numeric Last 4 digits of SSN plus the loan counter. Last Name + Numeric Last 5 digits of the participant s last name plus the loan counter. Joe Brown s first loan ID would be brown001. The loan ID field allows up to 8 alpha-numeric characters. If a last name is long, the system uses the first part of the last name. For Kilpatrick, the first loan ID would be kilpa001, then kilpa002 If a last name is less than 5 letters, then the full last name would be used. For Fox, the first loan ID would be fox001, fox002 First Initial + Last Initial + Numeric First and last initial plus the loan counter. Joe Brown would have a loan ID for loan #1 of jb001. October, 2006 Schwab Retirement Technologies Page 56 of 72

57 Changing Loan IDs When you use the Change Utilities application to change a Loan ID for an individual participant, it affects Loan ID assignments for C201/Loan Maintenance, C206/Loan Consolidate, Voice, Call Center, or Web and also applies to manual loans. You can change the Loan ID for an individual loan, but not for a group of participants. Note that in Loan Maintenance, you can override the Loan ID if required. Participant Inquiry Loan Summary Window When a loan is assigned, the Last Loan ID Counter field in the Participant Inquiry/Loan Summary window serves as a reference to assign the next loan ID. The counter field is updated with each new loan. All existing Loan Identifiers for participants appear in the Loan Identifier grid. These may not be based on the Loan ID assignment settings in Plan Maintenance (refer to the previous section). The fields are reported on the Utility Reporting/Participant Master (CP23) and tracked in Activity Tracking (C076). All loans requested through the paperless loan process are tracked in Activity Tracking with the 596 activity tracking origin code. The following are examples for the first two naming convention methods: Incremented Numerically (001, 002, 003 ) A participant taking the first loan is assigned loan ID appears in the Last Loan ID Counter field. When the second loan is taken, loan ID 002 is assigned, even if loan 001 is paid off and removed from the system. 002 then appears in the Last Loan ID Counter field. October, 2006 Schwab Retirement Technologies Page 57 of 72

58 Social Security Number plus Numeric A participant with a Social Security number of will be assigned loan ID , which appears in the Loan Identifier grid. The Last Loan Counter field displays this first loan as 1. The participant s second Loan ID would be , followed by The Last Loan Counter field is updated with 2, 3, etc. When a loan batch is failed, the loan counter showing the number of outstanding loans (Number of Loans field) in Participant Inquiry is reduced. For example, if a participant has one loan outstanding and then requests another loan, but then the batches for the second loan are failed, the outstanding number of loans remains as 1. When a loan batch is failed, the Last Loan ID Counter field is not reduced. C552/VRS/OPI Update The Update Report Setup window is modified with new options: Below: Modified Report Setup window with new Print Loan Amortization Report option. Select the Print Loan Amortization Report checkbox to print a loan amortization report. Enter a File Name and location or Browse to find the desired location. You can print the report without Social Security Numbers by selecting the Suppress Social Security Number checkbox. October, 2006 Schwab Retirement Technologies Page 58 of 72

59 The Loans window in C552/VRS/OPI Update stores tax codes used for the loan origination, fee and stock management purchase, consistent with the way transfer tax codes are stored. October, 2006 Schwab Retirement Technologies Page 59 of 72

60 Maintaining Divisions The Division buttons on the Plan Maintenance>Payroll Cycles window allow additions, changes, or deletions within the division grid. To view and modify this window, include the following setting in the RK SQL System Maintenance Miscellaneous System Settings: Payroll by Division = 1 To add a division, click Insert Division. When the following Division Settings dialog appears, enter the New Division Code, Cycle, and appropriate Pay Dates (day of the month or week) or Start Date. The Division Code in this field can be changed, but not deleted if a participant has that division code selected. Note: The Start Date is used only for bi-weekly cycles and is used to indicate when the first payment date should begin. October, 2006 Schwab Retirement Technologies Page 60 of 72

61 Then click Insert Division to save to the grid and database. Once a division is added, you can modify division settings by doing the following: Click Edit Division to open the following Division Settings dialog: Select a Cycle and enter a Pay Date (day of the cycle) the loan payment due date. The Pay Date 2 field is used only when a semi-monthly cycle is selected. The Start Date field is used only with bi-weekly cycles to indicate when the first payment should begin. Click Save to Grid to save your settings and update the Payroll Cycles Grid. If you do not click Save to Grid before closing this dialog, they are not saved to the database. October, 2006 Schwab Retirement Technologies Page 61 of 72

62 To delete a division code, go to the Payroll Cycles window and click Delete Division. A warning appears allowing you to either click Yes to confirm or No to cancel the action. Note: If a Division Code has been assigned to a participant in the plan, it cannot be deleted. Determining Payroll Frequency by Division Code Recordkeeping allows a participant s payroll frequency to be determined by the participant s division code. A payroll calendar is added at the plan-level to determine the exact date of the first payment. Payroll Calendars at the plan level determine the exact date of a first payment. The Division Code allows numeric characters and maintains the leading 0. Division Code 0 should be set up for the paperless loan process for the default payroll cycle. Refer to the appendix for examples and additional information on Payroll Calendars. The Division code allows alphanumeric characters and maintains the leading zero. Division Code 0 should be setup for the Paperless loan process for the default payroll cycle. October, 2006 Schwab Retirement Technologies Page 62 of 72

63 Application Administration Options The Application Administration console provides the following options for configuring paperless loans. Option Name: Admin Location: Description: Web location: Note: Pending QDRO Message Content Manager, Loan Request page Provides a customized explanation of a pending QDRO. Default message: You currently have a QDRO pending and are not eligible to request a loan. Please contact your Plan Administrator. Displays on the first Loan Modeling/Request page. The Pending QDRO Message option appears only if a QDRO is pending for that participant. Option Name: Admin Location: Description: Web location: Note: Consent Required Message Content Manager, Loan Request page Provides a customized explanation of a spousal consent requirement. Default message: Your plan requires spousal consent for a loan, but does not have this information on file. Please contact your Plan Administrator. Displays on the first Loan Modeling/Request page. The Consent Required Message option appears only if Spousal Consent is required and is not on file. Option Name: Admin Location: Description: Web location: Note: Message Body Content Manager, Loan Request page Provides a customized message and a link to required loan paperwork. The default message and a sample paperwork link are illustrated on the Model/Request Loan page below. Following is the HTML code for the paperwork link in the example: <br/><a href=" Loan paperwork</a><br/> Displays on the Loan Request page. Depending on the requirements of your system, you may want to repeat the paperwork link on subsequent loan pages, using the Message Body field for the corresponding page. In some circumstances, it may be desirable to display the entire loan agreement directly on the page, to guarantee that participants don t overlook the link. Option Name: Admin Location: Description: Web location: Show Amortization Schedule for Loans System Options, System Options Displays a full schedule of payments for the term of the requested loan. Appears on the Loan Summary page and on the Loan Modeling/Request Form page. October, 2006 Schwab Retirement Technologies Page 63 of 72

64 Option Name: Admin Location: Description: Web location: Enable Confirmation Options System Options, Confirmation Options, Loan Request Enables confirmation messages for paperless and paper-based loan request transactions. See illustration under Enabling Confirmation Options. Confirmation information appears on Confirmation page and on Pending Activity page. Requesting Paperless Loans Over the Web To request a paperless loan, the participant selects the Loan Modeling/Request option from the Plan Services menu. The paperless loan process on the Web is summarized and illustrated below. October, 2006 Schwab Retirement Technologies Page 64 of 72

65 Payment Calculation and Amortization Schedule The steps required to calculate the loan payment and request the loan are illustrated below: October, 2006 Schwab Retirement Technologies Page 65 of 72

66 Notes: When implementing paperless loans, the Payroll by Division options in SQL Recordkeeping and in Application Administration must be enabled so the system automatically populates the Payments/Cycle field with the participant's payroll cycle as defined by the participant's division code and the plan's payroll cycles. Request Summary and Approval When you request a loan, the following page provides loan information and prompts the participant to approve the terms of the loan. October, 2006 Schwab Retirement Technologies Page 66 of 72

67 Confirmation After accepting the terms of the loan, the following confirmation page appears. Note: A confirmation number displays only if the Loan Request option (System Options>Confirmation Options) is activated. Note: The pending loan information also displays on the Loan Modeling/Request Form page. October, 2006 Schwab Retirement Technologies Page 67 of 72

68 Pending Activity The Pending Activity page for the sample paperless loan appears below. The loan can be canceled by clicking Cancel in the Transaction Status column. October, 2006 Schwab Retirement Technologies Page 68 of 72