ADP Retirement Services. New Plan Implementation Guide FOR PLAN SPONSOR USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC.

Transcription

1 ADP Retirement Services New Plan Implementation Guide FOR PLAN SPONSOR USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC.

2 Welcome to ADP We are excited to get your new 401(k) plan started. At ADP, we consistently work to deliver the value you expect, and we will be with you every step of the way through the setup of your new retirement plan. You will receive personalized support from our team, right from the start. This Plan Implementation Guide includes an outline of the process and resources that support your plan set up. The Three Phases of Our Implementation Process Document Communicate Activate Our three-phase process takes the challenge out of plan implementation and gets your 401(k) plan started right. We ll make sure you have the tools and solutions to make plan administration easy and get your participants retirement ready. Your Implementation Manager will oversee the entire implementation process. This individual will work with you, manage the day-to-day details and timeline of your plan s implementation and keep you and your financial advisor (if applicable) informed. The implementation process typically takes several weeks, depending on the complexity of your plan. Now let s get started. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 1

3 Getting Started Phase I Document The Document Phase of the implementation process includes the gathering of information and documenting the plan design for your ADP plan. Step 1 Get Started Questions? Contact your Implementation Manager Your plan implementation begins with a Getting Started call with your Implementation Manager and your plan s financial advisor (if applicable). This call will kick off your plan s implementation process and will: Introduce your plan Implementation Manager and team Review the implementation process Discuss the roles and responsibilities that apply to you and your ADP team Step 2 Plan Review and Acceptance of Adoption Agreement Your Implementation Manager will review your new ADP plan provisions with you and your financial advisor (if applicable). After this meeting, you will: Receive your final plan Adoption Agreement to sign, if not already done. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 2

4 Getting Started Phase II Communicate Once the Documentation Phase is complete, it s time to communicate the new plan benefit to your employees. During the Communicate Phase, required notices to employees and participants must be distributed and enrollment meetings will be scheduled and held with your employees. ADP will also provide initial training on ADP s recordkeeping processes and operating guidelines, as well as some of the basics of plan administration and compliance testing. Step 1 Notify Participants The Department of Labor (DOL) and, in some cases, the Internal Revenue Service, require plan sponsors to provide certain notices and disclosures to eligible employees about the new plan. Some of the required documents that must be provided include: Participant Fee Disclosure Summary Plan Description Safe Harbor Notice (if applicable) Your Implementation Manager will provide these documents for you to distribute to your employees. If additional notices are required, your Implementation Manager will inform you and provide materials for your use. Step 2 Enroll Employees An ADP Retirement Counselor 1 (if applicable) will contact you to discuss your employee education needs, schedule and conduct enrollment meetings. It is the Retirement Counselor s job to help your employees understand the plan and its features and empower them to use it to its full potential. We will contact you to schedule an enrollment meeting to help your participants understand the features of your plan It s important that your participants attend the enrollment meeting Participants will be able to enroll in person or using our online enrollment application 2 Communicate Resources For help with completing the steps in this phase, click here. 1 Registered representatives of ADP Broker-Dealer, Inc., an affiliate of ADP, LLC, One ADP Blvd, Roseland, NJ. Member FINRA. 2 Online enrollment requires a limited time access code obtainable by plan sponsors from ADP. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 3

5 Getting Started Phase III Activate The Activate Phase completes the steps necessary to finalize your plan implementation allowing your plan to go live. During this Phase, ADP will provide initial training on ADP s recordkeeping processes and operating guidelines, as well as some of the basics of plan administration and compliance testing. Lastly, plan contributions begin and welcome letters are mailed to your participants. Questions? Contact your Implementation Manager To move to this phase, it is critical that ADP has all the information necessary to accurately recordkeep your plan and that the previous phases of the implementation process have been completed. Your Implementation Manager will work proactively with you to obtain all the information needed to activate your plan. Step 1 Attend Plan Administrator Training You will be scheduled for Plan Administrator training prior to your plan start date. This training will provide you with the necessary information about ADP s recordkeeping processes and operating guidelines and using the Plan Sponsor website. Step 2 Payroll Integration Setup and Initial Contributions Meet with your Implementation Manager to review the setup of your SMARTSync payroll integration if ADP is also your payroll provider. Your Implementation Manager will assist you with submitting your first contribution file to ADP. Step 3 Plan Sponsor Website Access You will receive an with your PRC credentials ahead of your start date. However, you will not be able to login until after your plan start date. On the Plan Sponsor website, you can access the Plan Administration Manual for instructions on ADP s recordkeeping processes and operating guidelines, as well as some of the basics of plan administration and compliance testing. Step 4 Mail Welcome Letters Welcome letters with login information will be mailed to your eligible employees. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 4

6 Communicate Phase Resources Overview of Required Notices During Plan Conversion During the Communicate Phase, you will be required to provide eligible employees and participants with notices and disclosure about the plan. The chart below provides a basic overview of the primary notifications required during the implementation of your plan. 1 Your Implementation Manager will discuss and provide any additional notices that may be applicable to your plan. Detailed information regarding ongoing notice and disclosure requirements may be found in the Plan Administration Manual, which will be available to you on the PRC website. Document What it is Who must receive it Participant Fee Disclosure Summary Plan Description Required notice to eligible employees and participants describing general plan information, plan fees, and investment information. The SPD informs participants about plan features and what to expect of the plan. Among other things, it must include information about: when and how employees become eligible to participate in the plan; contributions to the plan; the plan s vesting schedule; when employees are eligible to receive benefits; how to claim benefits; and rights and obligations participants have under the plan. Eligible employees Participants (including terminated employees with a vested account balance) Alternate payees under a Qualified Domestic Relation Order (QDRO) with an account balance Beneficiaries with an account balance Eligible employees Participants (including terminated employees with a vested account balance) Alternate payees under a QDRO with an account balance Beneficiaries with an account balance When During Implementation: When enrollment materials are furnished (such as at enrollment meetings) Ongoing: To newly eligible employees before they enroll Annually to all required recipients Updates (as required) if certain information changes during the year (30-90 days before the change is effective) ADP will provide you with sample update letters whenever a change occurs that requires you to send an update notice New Plans: Within 120 days after the plan is first effective 2 Ongoing: Within 90 days of becoming a participant in the plan 2 Safe Harbor Notice (if applicable) The notice is required by the IRS for a 401(k) plan that uses a safe harbor structure rather than performing nondiscrimination 401(k) contribution testing. All eligible employees, whether or not they participate in the plan. New Plans: No later than plan effective date (start date) but no more than 90 days before that date Ongoing: Annually 30 to 90 days before beginning of new plan year Newly-eligible employees by the date they become eligible (but no more than 90 days before) Supplemental notices, depending on plan terms 1 ADP, LLC and its affiliates do not offer investment, financial, tax or legal advice, and nothing in these materials is intended to be, nor should be construed as, advice or a recommendation for a particular situation or plan. You should consult with your own advisors for such advice. 2 If your plan includes a 401(k) Safe Harbor feature, the SPD must be provided to newly-eligible participants at the same time as the Safe Harbor Notice. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 5

7 Frequently Asked Questions about Starting a New Plan 1. What is a Plan Fiduciary? Anyone who exercises discretionary authority or discretionary control over management or administration of the plan, exercises any authority or control over management or disposition of plan assets, or gives investment advice for a fee or other compensation with respect to assets of the plan. 2. When will my employees be eligible for enrollment? Eligibility is determined by the plan eligibility requirement defined in the plan document. Some plans have a service requirement and others offer employees immediate eligibility. See your plan document for details. 3. Do employees have to attend an enrollment meeting? As a plan fiduciary, it is your responsibility to inform your employees about the existence of your plan and the benefits of participating in it. Broader plan participation can also help your plan pass the various compliance tests discussed earlier in this guide, of the benefits of saving and investing in your employer sponsored retirement plan. Therefore, it is in your best interests to encourage or require employees to attend an enrollment meeting. ADP Retirement Services offers a comprehensive library of enrollment and ongoing education communications to assist you with this portion of your fiduciary responsibility. You may be able to access the services of a Retirement Counselor, who can discuss with you your employee education needs, schedule and conduct enrollment meetings. A Retirement Counselor can help your employees understand the plan and its features and empower employees to use the plan to its full potential. 4. Can employees enroll online? At initial enrollment meetings, employees can join the plan using our enrollment site through the web or a mobile device. Your Retirement Counselor will review the online enrollment process with you, provide communications needed for enrollment and conduct the meetings. Employees who become eligible after initial enrollment will receive login information for enrolling on the website. 5. What is the deadline to ensure your eligible employees get enrolled in the plan prior to the start date? Enrollments should be submitted at least one week prior to the first payroll of the month in which your plan starts. Enrollments received after this time will generally be processed in the first payroll cycle after receipt. 6. Who do my employees call with questions once the plan has started? The mykplan.com website contains an abundance of helpful information. Participants who prefer to speak with an ADP Representative can call the Participant Call Center. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 6

8 Frequently Asked Questions about Conversion 7. Can my employees take loans? If your plan offers a loan feature, employees may take a loan from the retirement plan. Your plan document includes information and requirements for plan loans. Incorrect data, such as dates of hire, birthdates, termination dates, and compliance coding can affect eligibility determination, reporting, compliance testing, and your participants ability to access the website. 8. What is compliance coding and when do I need to submit it? Compliance coding identifies different employee groups, such as Key Employees and Non-Key Employees, Highly Compensated Employees and Non-Highly Compensated Employees, and Excluded Employees to ensure proper compliance testing for your plan. Coding to indicate your Plan s Excluded and Eligible Employees should be completed before you are ready to run your first payroll file. You should submit compliance coding during your plan s start month and make any necessary updates throughout the year. Some of the more important compliance coding is explained in the Activate Resources pages. Additional information about compliance coding will be provided in your Plan Administrator training and is explained in detail in your Plan Administration Manual. Compliance coding will be discussed in detail when you attend Plan Administrator training. 9. How long should implementation take? Under ideal circumstances, the entire process should be completed in 30 days. 10. Why do I need to attend Plan Administrator training? At ADP Retirement Services, we pride ourselves on making plan administration easy. During the training session, you will learn how to use our PRC website and all the tools we offer to help make it simple to administer your plan. This is the first of 5 instructor-led training programs that are offered to Plan Administrators. 11. How do my employees become vested? Employee contributions and any amounts rolled into the plan, adjusted for gains and losses, are always 100% vested. If your company makes a contribution (such as match), the vesting schedule you selected will apply as defined in the plan document. Vesting is based on years of service. Your plan defines how a year of service is counted for vesting purposes. 12. When does my company have to make our contributions? If your company is making contributions, matching or otherwise, they must be made by your company s tax-filing deadline (including extensions) to be deductible for the year to which they apply. 401(k) Safe Harbor matching contributions made on a per-payroll basis must be contributed by the last day of the next plan year quarter. FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 7

9 Frequently Asked Questions about Conversion 13. What is a form 5500 and does my plan need one? A Form 5500 is an annual filing required by the DOL and IRS that reports the status and activity of your retirement plan for the preceding plan year. The form is submitted to the DOL, typically at the same time as your company taxes. The form helps the DOL and IRS ensure that your plan is in compliance with applicable requirements. 14. What are Elective Deferrals? Elective Deferrals include Pre-Tax Elective Deferrals and, if provided for under your plan, Roth Elective Deferrals. Pre-Tax Deferrals are not includable in a participant s gross income at the time deferred and are irrevocably designated as Pre-Tax Elective Deferrals by the participant in his/her deferral election. Roth Elective Deferrals are includable in a participant s gross income at the time deferred and are irrevocably designated as Roth Elective Deferrals by the participant in his/her deferral election. If certain requirements are satisfied, distributions of Roth Elective Deferrals, including earnings, are tax-free. 15. Can I rollover my prior 401(k)? If you or your employees have a balance in a prior employer s 401(k) plan, you and your employees may be able to rollover that balance into your company s current 401(k) plan with ADP. We have a support team to help you and your employees with this process. Please contact our Rollover team for assistance at FOR PLAN SPONSOR USE ONLY. NOT FOR DISTRIBUTION TO THE GENERAL PUBLIC. New Plan Implementation Guide 8

10 ADP Retirement Services 71 Hanover Road Florham Park, NJ Welcome to ADP Retirement Services Helping your employees plan for their futures is a big responsibility. You can count on ADP to be there with you every step of the way on the road toward retirement plan success. We remain by your side through every twist and turn on your journey, providing the support, tools, and access needed to find your way. We are dedicated to helping your plan succeed and, together, we can lead its participants to better results. As you work with our exceptional service team, you will benefit from their in-depth industry knowledge on ERISA and compliance, investments, employee education and plan features to help you and participants maximize your ADP 401(k) plan. Your team of retirement professionals will work proactively with you on the ongoing management of your plan, in keeping the plan healthy and participants on track toward retirement readiness. ADP, LLC and its affiliates (ADP) do not offer investment, financial, tax or legal advice or management services. For its retirement plan recordkeeping customers, ADP agrees to act as a non-discretionary recordkeeper performing ministerial functions at the direction of the plan sponsor and/or plan administrator. Accordingly, ADP does not serve in a fiduciary capacity to any of the retirement plans for which it provides recordkeeping services. ADP also does not serve as an investment advisor or manager to any of the retirement plans for which it provides recordkeeping services. Nothing in these materials is intended to be, nor should be construed as, advice or a recommendation for a particular situation or plan. Please consult with your own advisors for such advice. ADP and the ADP logo are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other trademarks and service marks are the property of their respective owners Copyright ADP, LLC. ALL RIGHTS RESERVED. FOR PLAN SPONSOR USE ONLY NOT FOR DISTRIBUTION TO THE PUBLIC.