Helping you fulfill your fiduciary duties

Transcription

1 A Fiduciary Planning Guide for Plan Sponsors Helping you fulfill your fiduciary duties MassMutual s Regulatory Advisory Services 2016 Calendar

2 Contents Defined Contribution Plans 2 January March 4 April June 6 July September 8 October December Defined Benefit Plans 10 January March 12 April June 14 July September 16 October December Additional Information 18 Glossary of Terms 22 Recurring Activities and Obligations

3 MassMutual s 2016 Fiduciary calendar is designed to help you understand and fulfill certain of your fiduciary obligations. It is intended for use by our full-service, single employer defined contribution and defined benefit plan clients subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). This user-friendly guide, developed by MassMutual s Regulatory Advisory Services team, contains some key dates plan fiduciaries should be aware of related to plan filings, notices, distributions, testing and reporting requirements. The calendar is divided into calendar year quarters and topics (for both calendar year and non-calendar year plans) to help you easily note certain fiduciary obligations and deadlines. It is intended to provide useful information about MassMutual services, as applicable. Please note that the information contained in this calendar is not intended or written as specific legal or tax advice and should not be deemed, relied upon or considered for purposes of avoiding any federal tax penalties. Neither MassMutual nor any of its employees or representatives is authorized to give tax or legal advice. You must rely on the advice of your own independent legal and tax advisers. While many of the deadlines contained within apply to multiple employer plans, some deadlines may differ. This calendar is not designed for multiple employer plans, Taft-Hartley plans, certain union plans, governmental and tax-exempt plans. 1

4 First Quarter 2016 Defined Contribution January March Calendar Plan Year Deadline February 1 Plan Activity Distribute Forms 1099-R for distributions processed in the previous calendar year. February 1 (or February 10, if certain conditions are met) March 1 (March 31, if filing electronically) March 15 File Form 945, which reports Form 1099-R tax withholdings. File 1099-R information with the Internal Revenue Service (IRS). Filing deadline for corporate tax return and employer contribution deductions (unless an extension request is timely filed). March 15 Make 2015 corporate employer contribution to the plan to be eligible to take a tax deduction for Deadline based on corporate tax return filing due date (including extensions). March 15 1,2 March 15 Deadline for corrective action without excise tax for failed Actual Deferral Percentage (ADP) or Actual Contribution Percentage (ACP) test, if applicable. Deadline to request IRS waiver if the plan fails to meet minimum funding requirements. Quarterly Snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. January February March If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 2

5 Category Non-Calendar Plan Year Deadline Comments Distributions January 31 MassMutual provides this reporting service for plans/participants electing benefit payment services. February 1 (or February 10, if certain conditions are met) MassMutual provides this reporting service for plans/participants electing benefit payment services. March 1 (March 31, if filing electronically) MassMutual provides this reporting service for plans/participants electing benefit payment services. Within 2½ months after end of fiscal year If March 15 falls on a weekend or legal holiday, the deadline is the next business day. Contributions March 15 (for tax return without an extension) If March 15 falls on a weekend or legal holiday, make contribution no later than the next business day. Compliance testing Within 2½ months after end of plan year Otherwise, Form 5330 must be filed with excise tax by March 31, Funding By the 15th day of the 3rd month following the close of the plan year This is done by filing a private letter ruling request (with fee). Did you know? Discretionary plan amendments that are effective in 2016 are generally required to be adopted by the last day of the plan year. However, certain types of amendments (e.g., eliminating certain benefits) may only be adopted with a prospective effective date. In addition to discretionary amendments, there may be interim and/or regulatory amendments that must be timely adopted. The submission period ends on January 31 for Cycle E sponsors of individually designed plans (IDP) who file determination letter applications with the IRS. The one-year period for submitting determination letter applications for Cycle A IDPs opens February 1, 2016, and ends January 31, See Revenue Procedure for details on the IRS s staggered remedial amendment cycle system. Starting in 2017, the IRS will no longer accept determination letter applications for IDPs after Cycle A, except for new plans and terminating plans. Important additional information: 1 Unless a Qualified Matching Contribution (QMAC) or a Qualified Non-Elective Contribution (QNEC) is used to satisfy nondiscrimination testing, any excess contributions or excess aggregate contributions that are returned to highly compensated employees (HCEs) after 2½ months after the plan year end (for non-eligible Automatic Contribution Arrangement plans) will generally be subject to a 10% excise tax penalty. 2 While March 15, 2016 is the due date for corrective action without excise tax, a defined contribution (DC) plan s excess contributions resulting from 2015 plan year end test failures will need to be processed by MassMutual by March 14 for calendar year plans. For plans with a non-calendar plan year, a DC plan s excess contributions resulting from the 2015 plan year end test failure will need to be processed at least one business day prior to the required testing deadline. 3

6 Second Quarter 2016 Defined Contribution April June Calendar Plan Year Deadline Plan Activity April 1 Distribute initial Required Minimum Distributions (RMD) to qualifying participants. 1 April 15 Return Internal Revenue Code (IRC) 402(g) excess deferrals to participants. 2 June 30 Deadline for corrective action for failed Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) test if your plan meets all the EACA requirements. 3 Quarterly Snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. April May June If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 4

7 Category Non-Calendar Plan Year Deadline Comments Distributions April 1 Compliance testing April 15 Compliance testing Within six months of 2015 plan year end. Otherwise, Form 5330 must be filed with excise tax by March 31, Did you know? Under the Department of Labor s 408(b)(2) regulations, covered plan service providers must disclose information to plan fiduciaries to help assess the reasonableness of costs for plan services and/or compensation for those services. IRC 415 excess annual additions must be returned to the plan or participants, as applicable. Violations of the 415 limitations must be corrected in accordance with the IRS s Employee Plans Compliance Resolution System (EPCRS). Under the DOL s 404(a)(5) regulations, participant-directed account plans subject to ERISA are required to provide periodic detailed information regarding general plan level characteristics as well as administrative and participant expenses. This notice must be provided before a participant becomes eligible to participate in the plan and at least annually thereafter. Defined Contribution plan sponsors must provide benefit statements at least quarterly to participants who can direct their own investments and annually to those who cannot. Important additional information: 1 Generally, by April 1 of the calendar year following the later of the year the participant turned age 70½ or retires (other than 5% owners). 2 Any money deferred in excess of IRS limits ($18,000 in 2016, plus an additional catch-up of $6,000 for those over age 50) must be returned to the participant. Excess deferrals returned after April 15 will be taxed twice and may jeopardize your plan s qualified status. 3 Unless a plan is using a Qualified Matching Contribution (QMAC) or Qualified Non-Elective Contribution (QNEC) to satisfy ACP/ADP testing, the plan has a six-month period to correct the failed test before the corrective distributions are subject to an employer-paid 10% excise tax. 5

8 Third Quarter 2016 Defined Contribution July September Calendar Plan Year Deadline July 29 Plan Activity Distribute Summary of Material Modification (SMM), if required. July 31 Electronically file Form 5500 with Department of Labor (DOL). Filing extension is available. 1, 2 July 31 Electronically file Form 8955-SSA with the IRS, if applicable to your plan 1 Filing extension is available. 1 July 31 (Employer s tax year) File Form 5330 with the IRS to report excise taxes related to your retirement plan. July 31 Deadline for filing Form 5558 to apply for a one-time filing extension for Form 5500, Form 8955-SSA or Form 5330, if necessary. September 30 (within two months of Form 5500 normal or extended due date) Distribute Summary Annual Report to participants. Quarterly Snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. July August September If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 6

9 Category Non-Calendar Plan Year Deadline Comments Notices Within 210 days after the close of the plan year in which the amendment was adopted. No later than the last day of the 7th calendar month after the close of the plan year. Filing extension is available. 1, 2 No later than the last day of the 7th calendar month after the close of the plan year. Filing extension is available. 1 By the last day of the 7th month following the employer s tax year in which the prohibited transaction occurred. Depending upon the services elected, MassMutual will request a Form 5500 filing extension (Form 5558) unless otherwise notified by the plan sponsor. If the filing due date falls on a weekend or Federal holiday, file no later than the next business day. MassMutual will timely submit a Form 5558 filing extension request to the IRS (when applicable) unless otherwise notified by the plan sponsor. If Form 8955-SSA filing due date falls on a weekend or legal holiday, file no later than the next business day. The type of excise tax incurred determines the filing date. For example, a Form 5330 filed for the late deposit of employee contributions (and/or loan repayments) withheld from pay is subject to the IRC 4975 excise tax. Notices Before Form 5500 regular filing due date (without extension). Within two months of Form 5500 filing (normal or extended) due date. Form 5558 is used when applying for a one-time extension to file Form 5500, Form 8955-SSA or Form If the filing due date falls on a weekend or legal holiday, file no later than the next business day. When Form 5500 is filed under an extension, the Summary Annual Report is distributed within two months of the extension. Be Prepared If certain participant notice requirements apply to your plan, begin notice preparation this quarter (see Fourth Quarter section for details). Did you know? A Summary Plan Description (SPD) must be provided automatically to participants within 90 days of becoming covered by the plan. However, a plan has 120 days after first becoming subject to ERISA to distribute the SPD to its constituents. An updated SPD, which incorporates all plan amendments, must be provided to participants and beneficiaries every 5 years. If no amendments have been adopted, the SPD must be furnished at least once every 10 years. Important additional information: 1 A 2½-month extension is available if Form 5558 is timely filed. An automatic extension is available if certain criteria are met. 2 Large plans (100 participants or more) must include audited financial statements. Small plans may waive the audited financial statement requirement when certain conditions are met. 7

10 Fourth Quarter 2016 Defined Contribution October December Calendar Plan Year Deadline October 15 Plan Activity Electronically file Form 5500 with the DOL if filing under an extension submitted by a timely filed Form October 15 Electronically file Form 8955-SSA with the IRS, if filing under an extension submitted by a timely filed Form October 15 Deadline to adopt a corrective amendment if the plan fails minimum coverage, nondiscrimination and/or compensation for the 2015 plan year. No earlier than October 1 up through December 1 No earlier than October 1 up through December 1 December 1 December 31 December 31 Provide Safe Harbor notice to participants, if applicable to your plan. Provide notification to participants of their rights if your plan includes an Automatic Contribution Arrangement. Provide notification of rights to participants if your plan offers a qualified default investment alternative (QDIA). Issue RMDs to participants who have started receiving distributions, including participants who received their initial RMD this year (by April 1). Discretionary plan amendments that are effective in 2016 are generally required to be adopted by the last day of the plan year. December 31 Return excess contributions and/or excess aggregate contributions for failed Actual Deferral Percentage and/or Actual Contributions Percentage tests, if applicable. 1 October November December If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 8

11 Category Non-Calendar Plan Year Deadline Comments Compliance testing Notices Notices Notices 15th day of the 10th month after the close of the plan year. 15th day of the 10th month after the close of the plan year. 15th day of the 10th month after the close of the plan year. Generally, at least 30 days, but not more than 90 days, before the beginning of the next plan year. Generally, at least 30 days, but not more than 90 days, before the beginning of the next plan year. Generally, at least 30 days prior to the beginning of the plan year. In addition to the two-month extension to the normal filing date provided by Form 5558, there is also an automatic extension available when certain criteria are met. If filing due date falls on a weekend or Federal holiday, file no later than the next business day. In addition to the two-month extension to the normal filing date provided by Form 5558, there is also an automatic extension available when certain criteria are met. If filing due date falls on a weekend or legal holiday, file no later than the next business day. If a plan hasn t adopted a corrective amendment within this time frame, it must be corrected through the IRS s Employee Plans Compliance Resolution System. MassMutual can provide both sample and customized notices. MassMutual can provide both sample and customized notices. Distributions December 31 Amendments End of plan year. Certain types of amendments (e.g., eliminating certain benefits) may only be adopted with a prospective effective date. In addition to discretionary amendments, there may be interim and/or regulatory amendments that must be timely adopted. Compliance testing Last day of the 12th month after plan year end. If corrective action is made after the first 2½ months of the correction period, a 10% excise tax penalty generally will apply. (Statutory correction period is the 12-month period following the close of the plan year for which the test failed). Did you know? If you want to make plan design changes, you need to notify MassMutual by December 1 of the year prior to the effective date of the change. 2 Important additional information: 1 To avoid the IRS correctional program, you may either return the excess contributions and/or excess aggregate contributions or make a Qualified Non-Elective Contribution (QNEC) or Qualified Matching Contribution (QMAC). EPCRS Corrections for Operational Violations must be corrected within 24 months after plan year end. 2 The December 1 deadline is for calendar year plans. Non-calendar plan deadline is 30 days prior to beginning of the new plan year. 9

12 First Quarter 2016 Defined Benefit January March Calendar Plan Year Deadline January 15 Plan Activity Make quarterly plan contribution, if applicable. February 1 Distribute Forms 1099-R for distributions processed in previous calendar year. February 1 (or February 10, if certain conditions are met) February 14 File Form 945 to report Form 1099-R income tax withholdings. File Form 10 with the Pension Benefit Guaranty Corporation (PBGC). March 1 (March 31, if filing electronically) March 15 File 1099-R information with the Internal Revenue Service. Filing deadline for corporate tax returns and employer contribution deduction (unless an extension request is timely filed). March 15 Make 2015 corporate employer contribution to the plan to be eligible to take a tax deduction for Deadline based on corporate tax return filing due date (including extensions). March 15 Deadline to request IRS waiver if plan fails to meet minimum funding requirements for the prior plan year. March 31 Plan actuary must certify the funding status of the plan for the purpose of potential benefit restrictions. (See Second Quarter for Participant Notice requirements). Quarterly Snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. January February March If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 10

13 Category Non-Calendar Plan Year Deadline Comments Funding The non-calendar year deadline for the second quarterly payment is within 3½ months after the plan year. Distributions January 31 MassMutual provides this reporting service for sponsors electing benefit payment services. February 1 (or February 10, if certain conditions are met). Generally, within 30 days after the plan administrator knows of a reportable event. March 1 (March 31, if filing electronically). MassMutual provides this reporting service for sponsors electing benefit payment services. If the January 15 quarterly plan contribution was missed by more than 30 days. You should consult with your plan s actuary regarding whether your plan qualifies for a waiver. Within 2½ months after the end of the fiscal year (without extension). If March 15 falls on a weekend or legal holiday, make contribution no later than the next business day. Contributions March 15 (for tax return without an extension). If March 15 falls on a weekend or legal holiday, make contribution no later than the next business day. Certification By the 15th day of the 3rd month following the close of the plan year. Before the first day of the 4th month of the plan year. Waiver request is generally made through a private letter ruling request (with fee). This funding status is known as the Adjusted Funding Target Attainment Percentage (AFTAP). 1 Did you know? You must make any discretionary amendments to your plan by December 31 (calendar-year plans). In addition to discretionary amendments, there may be interim and/or regulatory amendments that must be timely adopted. Certain types of amendments (e.g., eliminating certain benefits) may only be adopted with a prospective effective date. Under the Department of Labor s 408(b)(2) regulations, plan service providers must disclose information to plan fiduciaries to help assess the reasonableness of costs for plan services and/or compensation for those services. The submission period ends on January 31 for Cycle E sponsors of individually designed plans (IDP) who file determination letter applications with the IRS. The one-year period for submitting determination letter applications for Cycle A IDPs opens February 1, 2016, and ends January 31, See Revenue Procedure for details on the IRS s staggered remedial amendment cycle system. Starting in 2017, the IRS will no longer accept determination letter applications for IDPs after Cycle A, except for new plans and terminating plans. Important additional information: 1 If the certified or deemed AFTAP is at least 60% but less than 80%, certain restrictions apply, including the partial restriction of certain forms of benefit. If the certified or deemed AFTAP is less than 60%, benefit accruals are frozen and certain restrictions apply. 11

14 Second Quarter 2016 Defined Benefit April June Calendar Plan Year Deadline April 1 Plan Activity Distribute initial Required Minimum Distributions (RMD) to qualifying participants. April 15 Make quarterly plan contribution, if applicable. April 15 File report with PBGC if plan is less than 80% funded. 1 April 30 2 Provide Annual Funding Notice to plan participants. April 30 May 15 (generally) If a defined benefit plan is determined to be in restricted status, distribute ERISA 101(j) notice to all participants and beneficiaries. File Form 10 with the PBGC if the April 15 quarterly plan contribution deadline was missed by more than 30 days. Quarterly Snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. April May June If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 12

15 Category Non-Calendar Plan Year Deadline Comments Distributions April 1 By April 1 of the calendar year following the later of the year the participant turned age 70½ or retires (other than 5% owners). Funding The non-calendar year deadline for the second quarterly payment is within 3½ months after the plan year. Within 105 days following the close of the filer s information year (generally a fiscal year). Notices 120 days after the beginning of the plan year. 2 Notices No later than 30 days after the effective date of the restrictions. Notice is required if the AFTAP is a certain percentage. Generally, within 30 days after the plan administrator knows of a reportable event. You should consult with your plan s actuary regarding whether your plan qualifies for a waiver. If the last day of the period falls on a weekend or Federal holiday, the period runs until the end of the next regular business day. Did you know? Benefits that exceed 415 DB plan limitations must be returned or corrected in accordance with the IRS s Employee Plans Compliance Resolution System (EPCRS). Important additional information: 1 Unless certain exemptions are met. 2 Small plans (fewer than 100 participants) must provide notice the earlier of the date the Form 5500 was filed or the filing due date for the Form 5500 (including extensions). 13

16 Third Quarter 2016 Defined Benefit July September Calendar Plan Year Deadline July 15 Plan Activity Make quarterly plan contribution, if applicable. July 29 Distribute Summary of Material Modification (SMM), if required. July 31 Electronically file Form 5500 with Department of Labor. Filing extension is available. 1, 2 July 31 Electronically file Form 8955-SSA with the Internal Revenue Service, if applicable to your plan. 1 July 31 (Employer s tax year) File Form 5330 with the IRS to report excise taxes related to your retirement plan. July 31 Deadline for filing Form 5558 to apply for a one-time filing extension for Form 5500, Form 8955-SSA or Form 5330, if necessary. August 14 File Form 10 with the PBGC if the July 15 quarterly plan contribution deadline was missed by more than 30 days. September 30 Plan actuary must certify the funding status of the plan for the purpose of potential benefit restrictions. Quarterly snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. July August September If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 14

17 Category Non-Calendar Plan Year Deadline Comments Funding Notices The non-calendar year deadline for the second quarterly payment is within 6½ months after the plan year. Within 210 days after the close of the plan year in which the amendment was adopted. No later than the last day of the 7th calendar month after the close of the plan year. Filing extension is available. No later than the last day of the 7th calendar month after the close of the plan year. Filing extension is available. By the last day of the 7th month following the employer s tax year in which the prohibited transaction occurred. Before Form 5500 normal filing due date (without extension). Generally, within 30 days after the plan administrator knows of a reportable event. MassMutual will timely submit a Form 5558 filing extension request to the IRS (when applicable) unless notified otherwise by the plan sponsor. If filing due date falls on a weekend or legal holiday, file no later than the next business day. MassMutual will timely submit a Form 5558 filing extension request to the IRS (when applicable) unless notified otherwise by the plan sponsor. If filing due date falls on a weekend or legal holiday, file no later than the next business day. The type of excise tax incurred determines the filing date. For example, employee contributory plans are subject to the same DOL timing rules regarding participant contributions withheld from pay as DC plans. If a contribution is determined to be late, it is subject to IRC 4975 excise tax. Form 5558 is used when applying for a one-time extension to file Form 5500, Form 8955-SSA or Form If the filing date falls on a weekend or legal holiday, file no later than the next business day. You should consult with your plan s actuary regarding whether your plan qualifies for a waiver. If the last day of the period falls on a weekend or Federal holiday, the period runs until the end of the next regular business day. Certification Before the first day of the 4th month of the plan year. MassMutual can provide both sample and customized notices. Did you know? A Summary Plan Description (SPD) must be provided automatically to participants within 90 days of becoming covered by the plan and to pension plan beneficiaries within 90 days after first receiving benefits. However, a plan has 120 days after first becoming subject to ERISA to distribute the SPD to its constituents. An updated SPD, which incorporates all plan amendments, must be provided to participants and beneficiaries every 5 years. If no amendments have been adopted, the SPD must be furnished at least once every 10 years. Important additional information: 1 A 2 ½ month extension is available if Form 5558 is timely filed. An automatic extension is available if certain criteria are met. 2 Large plans (100 participants or more) must include audited financial statements. Small plans may waive the audited financial statement requirement when certain conditions are met. 15

18 Fourth Quarter 2016 Defined Benefit October December Calendar Plan Year Deadline October 15 Plan Activity Make quarterly plan contribution, if applicable. October 15 Electronically file PBGC Comprehensive Premium Filing. October 15 Electronically file Form 5500 with DOL if filing under an extension submitted by a timely filed Form October 15 Electronically file Form 8955-SSA with IRS, if filing under an extension submitted by a timely filed Form October 15 Deadline to adopt a corrective plan amendment if the plan fails minimum coverage, nondiscrimination, compensation and/or minimum participation for the 2015 plan year. November 15 File Form 10 with the PBGC if the July 15 quarterly plan contribution deadline was missed by more than 30 days. December 31 December 31 Issue Required Minimum Distributions to participants who have started receiving distributions, including participants who received their initial RMD this year (by April 1). Discretionary plan amendments that are effective in 2015 are generally required to be adopted by the last day of the plan year. Quarterly snapshot The highlighted dates below reflect the calendar year deadlines listed above. Please take a moment to add these dates, if applicable, to your calendar. October November December If you are not certain what your plan s specific responsibilities are for the items noted above, please contact your MassMutual representative and/or plan adviser. 16

19 Category Non-Calendar Plan Year Deadline Comments Funding The non-calendar year deadline for the second quarterly payment is within 9½ months after the plan year. 15th day of the 10th month after the close of the plan year. 15th day of the 10th month after the close of the plan year. In addition to the two-month extension to the normal filing date provided by Form 5558, there is also an automatic extension when certain criteria are met. If filing due date falls on a weekend or Federal holiday, file no later than the next business day. 15th day of the 10th month after the close of the plan year. In addition to the two-month extension to the normal filing date provided by Form 5558, there is also an automatic extension available when certain criteria are met. If Form 8955-SSA filing due date falls on a weekend or legal holiday, file no later than the next business day. Compliance testing 15th day of the 10th month after the close of the plan year. Generally, within 30 days after a plan administrator knows of a reportable event. If a plan hasn t adopted a corrective amendment within this time frame, it must be corrected through the IRS s Employee Plans Compliance Resolution System. You should consult with your plan s actuary regarding whether your plan qualifies for a waiver. If the last day of the period falls on a weekend or federal holiday, the period runs until the end of the next regular business day. Distributions December 31 Amendments End of plan year. Certain types of amendments (e.g., eliminating certain benefits) may only be adopted with a prospective effective date. In addition to discretionary amendments, there may be interim and/or regulatory amendments that must be timely adopted. Did you know? If you want to make plan design changes, you need to notify MassMutual by December 1 (of the year prior to the effective date of the changes). Employed participants with nonforfeitable accrued benefits must either receive a periodic benefit statement at least once every three years or annually be notified how to obtain a statement. ERISA 204(h) notices must be provided to affected plan participants (and alternative payees of a Qualified Domestic Relations Order [QDRO]) when a plan amendment significantly reduces or ceases the rate of future benefit accrual, or eliminates or significantly reduces an early retirement benefit or retirement-type subsidy. Important additional information: 1 The December 1 deadline is for calendar year plans. The non-calendar year plan deadline is 30 days prior to beginning of the new plan year. 17

20 Glossary of Terms Defined Contribution and Defined Benefit Key Terms Actual Contribution Percentage (ACP) test: An annual test that compares the average of the actual contribution percentages of highly compensated employees (HCEs) to that of non-highly compensated employees (NHCEs). Contributions include employee after-tax contributions and/ or matching contributions (excluding Roth contributions). Once individual contribution percentages are averaged for the two groups, the test is performed to determine whether a plan is discriminating in favor of HCEs. Actual Deferral Percentage (ADP) test: An annual test in a 401(k) plan that compares the average of the actual deferral percentages of highly compensated employees (HCEs) to that of non-highly compensated employees (NHCEs). Once individual deferral percentages are averaged for the two groups, the test is performed to determine whether a plan is discriminating in favor of HCEs. Adjusted Funding Target Attainment Percentage (AFTAP): The AFTAP is a ratio of the defined benefit plan s adjusted assets to its adjusted funding target. If a plan s AFTAP falls below a certain specified percentage (depending on the type of limitation), then a plan sponsor must effect certain benefit restrictions and/or other events. Annual Funding Notice: Basic information about the status and financial condition of the defined benefit pension plan, including the plan s funding percentage, assets and liabilities, and a description of the benefits guaranteed by the Pension Benefit Guaranty Corporation. Automatic Contribution Arrangement (ACA): A defined contribution plan feature that allows an employer to automatically enroll an employee in its plan, once eligibility and plan entry dates are satisfied, unless the employee affirmatively elects otherwise. Defined Benefit Plan: Also known as a traditional pension plan, a defined benefit plan promises the participant a specified monthly benefit at retirement. Often, the benefit is based on factors such as the participant s salary, age and the number of years he or she worked for the employer. The plan may state this promised benefit as an exact dollar amount, such as $100 per month at retirement. Or, more commonly, it may calculate the benefit through a plan formula that considers such factors as salary and years of service. Defined Contribution Plan: A type of retirement plan in which the employer, employee or both contribute to the employee s individual account under the plan. The amount in the account at distribution includes the contributions and investment gains or losses, minus any investment and administrative fees. Examples of defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans and profit-sharing plans. Department of Labor (DOL): A U.S. federal bureau that has broad authority to regulate and enforce employment laws, including ERISA as it pertains to pension, welfare and other benefits programs provided by employers. The Employee Benefits Security Administration (EBSA) is the sub-department within the DOL that is primarily interested in pension plan regulations and enforcement. 18

21 Discretionary Plan Amendments: Changes made to a plan (e.g., plan design changes) that are not required by law or statute. Eligible Automatic Contribution Arrangement (EACA): A type of ACA that must uniformly apply the plan s default contribution percentage to all employees after providing them a required notice. It may allow employees to withdraw automatic enrollment contributions (with earnings) by making a withdrawal election as required by the terms of the plan. Employees are 100% vested in their automatic enrollment contributions. Employer Identification Number (EIN): A number assigned to a plan sponsor by the Internal Revenue Service for the purpose of tax administration. With the EIN, publicly available plan information (such as the plan s Form 5500 filing) is accessible information for plan participants. Employer Plans Compliance Resolution System (EPCRS): The IRS program that plan sponsors or administrators may use to correct mistakes made in connection with the plan. The Self Correction Program generally permits a plan sponsor to correct certain plan failures without contacting the IRS or paying any fee. The Voluntary Correction Program generally permits a plan sponsor to, at any time before an IRS audit, pay a fee and receive IRS approval for correction of plan failures. The Audit Closing Agreement Program generally permits a plan sponsor to pay a sanction and correct a plan failure while the plan is under IRS audit. Employee Retirement Income Security Act of 1974 (ERISA): The law that sets standards of protection for individuals in most voluntarily established private-sector retirement plans. ERISA requires employers to administer retirement plans, including plan reporting, disclosures to participants and beneficiaries within certain time frames, minimum participation and minimum vesting standards. Excess Aggregate Contribution: The aggregate amount of the matching contributions and employee (after-tax) contributions made on behalf of the HCEs for a plan year, over the maximum amount of these contributions permitted under the ACP test s contribution percentage requirement. If there is an excess aggregate contribution for a plan year, it must be corrected. Excludable Employees: This is a term used to describe a group of employees who can be disregarded (if plan so provides) when determining if the plan satisfies minimum coverage, certain nondiscrimination tests and, for defined benefit plans, the minimum participation test. Form 10 (Advance Notice of Reportable Events): Requires submission of information relating to event, plan and controlled group for change in contributing sponsor or controlled group, liquidation, loan default, transfer of benefit liabilities and various other events. This requirement applies to privately held controlled groups with plans having aggregate unfunded vested benefits over $50 million and an aggregate funded vested percentage under 90 percent. You should consult with your plan s actuary regarding whether your plan qualifies for a waiver. Form 1099-R (Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.): The form, filed with the IRS, is completed for each individual who received a distribution of $10 or more from profit-sharing or retirement plans, et cetera. 19

22 Glossary of Terms (continued) Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans): The form is used to report and pay the excise tax on certain prohibited transactions related to employee benefit plans, including the late deposit of employee contributions and loan repayments withheld from pay. Form 5500 Annual Return/Report of Employee Benefit Plan: An annual report, jointly developed by the IRS, DOL and Pension Benefit Guaranty Corporation, used by employee benefit plans to satisfy annual reporting requirements under the Internal Revenue Code and ERISA. Form 8955-SSA (Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits): The form is used to report information to the IRS about separated participants with deferred vested benefits under the plan. The IRS forwards this information to the Social Security Administration. Internal Revenue Code (IRC): A comprehensive set of tax laws created by the IRS that covers income taxes, payroll taxes, estate taxes, gift taxes and excise taxes. Internal Revenue Service (IRS): A federal agency responsible for administering and enforcing the IRC, as well as tax collection and tax law enforcement. IRS 402(g) excess deferrals: Employee elective deferrals (for traditional and Safe Harbor plans) that exceed the IRC s allowable limit for the calendar year ($18,000 in 2015). Generally, participants should aggregate all elective deferrals they make to all plans in which they participate to determine if the limits have been exceeded. Pension Benefit Guaranty Corporation (PBGC): Funded by the insurance premiums it collects and other investments, the PBGC insures and guarantees private sector workers defined benefit plan pensions. Pension Protection Act of 2006 (PPA): Pension reform law establishing new funding requirements for defined benefit plans as well as new requirements affecting cash balance plans, defined contribution plans and certain deferred compensation plans. Qualified Automatic Contribution Arrangement (QACA): An automatic contribution arrangement with special Safe Harbor provisions that, if all the requirements are met, exempt a 401(k) plan from ADP and/or ACP nondiscrimination testing requirements. Qualified Default Investment Alternative (QDIA): If a QDIA meets certain criteria set forth under final regulations issued by the DOL, it can provide the plan fiduciary with a Safe Harbor for the investment of retirement plan contributions in the absence of investment direction by the plan participant. Qualified Joint and Survivor Annuity (QJSA): A type of retirement benefit paid as a life annuity (a series of payments, usually monthly, for life) to the participant and a survivor annuity over the life of the participant s surviving spouse (or a former spouse, child or dependent who must be treated as a surviving spouse under a Qualified Domestic Relations Order) following the participant s death. Qualified Matching Contribution (QMAC): A matching contribution that is fully vested when it is made to the plan and subject to certain distribution restrictions applicable to elective contributions regardless of whether it is taken into account for the plan s ADP test. 20

23 Qualified Non-Elective Contribution (QNEC): Contributions made by the plan sponsor to a participant s account that meet certain vesting, distribution and nondiscrimination requirements. Required Minimum Distribution (RMD): The minimum amount a participant must withdraw from his or her retirement plan account each year, generally beginning at age 70½. Safe Harbor Notice: Safe Harbor Plans (as defined below) are required to provide an annual notice to each defined contribution plan participant that discloses certain information related to the plan s design, such as eligibility, vesting and the company contribution calculation. Safe Harbor Plan: A type of plan design that enables an employer to be exempt from certain plan testing in exchange for providing certain employer (or non-elective) contributions to plan participants, provided certain conditions are met. Summary Annual Report (SAR): An annual disclosure statement for ERISA plan participants in narrative form that summarizes the defined contribution plan s latest annual report on the sponsor s Form Summary of Material Modification (SMM): Describes material modifications to a plan and changes in the information required to be in the Summary Plan Description (SPD). The SMM must generally be delivered to ERISA plan participants and ERISA pension plan beneficiaries receiving benefits. Distribution of an updated SPD satisfies this requirement. Summary Plan Description (SPD): A disclosure document that informs participants and beneficiaries about their plan and how it operates. The SPD must be written for the average participant and be sufficiently comprehensive to apprise covered persons of their benefits, rights and obligations under the plan. 21

24 Recurring Activities and Obligations Plan type Activity Details DC plans only Notify participants about a plan s Qualified Default Investment Alternative (QDIA) and/or automatic enrollment arrangement. If the plan has a QDIA or auto-enrollment feature, the notice requirement applies to all newly eligible plan participants. DC plans only Provide notice of diversification rights to participants. This notice applies to plans that include employer stock or employer stock funds as an investment option under the plan. The notice must outline the diversification rights under ERISA and describe the importance of diversifying retirement account assets. DC plans only Provide annual Safe Harbor notice to plan participants. The notice is required when the employer plans on making a Safe Harbor contribution in the following plan year. The notice requirements also apply to a Qualified Automatic Contribution Arrangement (QACA) Safe Harbor plan. DC plans only Provide supplemental notice of employer contribution. This notice applies if a discretionary Safe Harbor non-elective 3% contribution plan provision is elected. Notify MassMutual if you do not intend on making this contribution for the 2016 plan year. DC plans only Provide annual Safe Harbor notice to plan participants that states the plan may be amended mid-year to reduce or suspend the Safe Harbor contribution. If the plan is amended in 2016 to reduce or suspend the Safe Harbor contribution, then a supplemental notice must notify participants of the reduction or suspension of Safe Harbor contributions. DC plans only (individual account plans) DC plans only (participantdirected accounts) Provide blackout notification to participants and beneficiaries. Annually provide detailed plan information. ERISA 101(i) notice is required for any period of more than three consecutive business days during which there will be a temporary suspension, limitation or restriction of account activities, including the ability to direct or diversify plan assets, obtain loans or obtain distributions. This DOL regulation 404a-5 notice provides detailed information regarding general plan characteristics, administrative and individual account expenses, and investment-related information, including performance data and expense ratios. DC plans only Provide benefit statements at least quarterly to participants who can direct their own investments and annually to those who cannot. If a quarterly statement is required, it will include any plan fees directly charged to participants during the quarter. Special requirements under the DOL s 404a-5 regulation apply to the content of the statement for participant-directed plans and plan loan repayments, if applicable. 22

25 Time frame Comments Generally, at least 30 days in advance of eligibility. If the plan has immediate eligibility, notice may be given less than 30 days in advance, if certain other criteria are satisfied. No later than 30 days before the first date on which the individual is eligible to exercise the right to divest investments in employer stock. Generally, at least 30 days, but not more than 90 days, before the beginning of the next plan year. MassMutual can provide both sample and customized notices. Generally, at least 30 days, but not more than 90 days, before the beginning of the next plan year. MassMutual can provide both sample and customized notices. No reduction or suspension can take effect until the plan is amended, or, if later, at least 30 days after this supplemental notice is provided. The annual notice is generally provided at least 30 days, but not more than 90 days, before the beginning of the next plan year. Generally, requires at least 30 days, but no more than 60 days, advance notice. Notice must be provided before an employee becomes eligible to participate in the plan and at least annually thereafter. Depending on the services selected, MassMutual will include the annual notice with participants second quarterly benefits statement or will make them available on our sponsor website for sponsors to distribute. Within 45 days of each calendar quarter for participant-directed plans. For plans with participant-directed investments, benefit statements must be provided no later than the Form 5500 filing deadline (including extensions). 23

26 Recurring activities and obligations (continued) Plan type Activity Details DC and DB Prior to retirement or when a participant is otherwise eligible for a distribution, provide notice to participants regarding the distributions and spousal rights. A Qualified Joint and Survivor Annuity (QJSA) notice and a Qualified Optional Survivor Annuity (QOSA) notice provide the terms and conditions, rights to waive, spousal consent rule, explanation of optional forms of benefits and their relative value. DC and DB Deposit employee contributions and/or loan repayments withheld from pay. This requirement applies to any deferrals, loan repayments and/or after-tax contributions withheld from employees pay. The DOL has provided employers who sponsor plans with fewer than 100 participants a seven-business-day safe harbor to remit employee contributions to the plan. DC and DB Provide Summary Plan Description (SPD) automatically to participants. This notice must be sent to participants within 90 days of becoming covered by the plan and to beneficiaries within 90 days after first receiving benefits. DC and DB Provide certain types of plan documents in response to written requests. This requirement applies to certain documents including plan documents, SPDs (or SMMs), most recent Form 5500 and trust agreement. DC and DB Provide ERISA 204(h) notices to affected participants. This notice applies to participants (and alternate payees of Qualified Domestic Relations Orders) when a plan subject to IRC 411(d)(6) amends the plan to significantly reduce or cease the rate of future benefit accrual, or eliminate or significantly reduce an early retirement benefit or retirement-type subsidy. DC and DB Send withholding notice for annuity and pension payments for participants. This notice applies to participants who elect or modify income tax withholdings from periodic payments. DB plans only Provide suspension of benefits notice to active participants or retired participants who return to work. This notice requirement applies to participants who work past normal retirement age date unless the plan sponsor provides a benefit at late retirement that is the greater of the accrued benefit at late retirement date or the actuarial equivalent of the normal retirement benefit. DB plans only Provide periodic benefit statement with a notice detailing how to obtain a statement. This notice applies to employed participants with nonforfeitable accrued benefits. 24