Forms, Notices, and Policies inside the Retirement Document System

Transcription

1 Forms, Notices, and Policies inside the Retirement Document System Excerpt from the System Version 1.20g Web Update Release Notes DS 1.20g DS Version June 2, 2011 Retirement Plan Documents (RD) New Features and Enhancements: Significant enhancements to Employee Communications. This release introduces the Forms Design Preference screen under the folder view, along with eleven (11) administrative forms for Defined Contribution (DC) plans, including 403(b) plans. The contents of newly redesigned forms will be driven by the selections on the design preference screen as well as the options selected within plans adoption agreement or checklist. Restructure of the Summary Plan Description (SPD) folder view area to utilize tabs for related policies and procedures, such as the plan s Expense Policy. See page 4 of these release notes. An updated Plan Expense Policy to comply with the requirements of DOL reg. 408(b)-2. See pages 5 and 6 of these release notes. Enhanced SPDs for DC plans. We have revised the DC plans SPDs to incorporate language based on selections in the following Amendments: 2007 Interim, 2009 Interim, EACA, QACA, and PTO. In addition, we have incorporated the subscriber suggestions listed under Issues Addressed beginning on page 1 of these release notes. Revised loan materials, including changes to the folder view Loan Policy screen, and substantially rewritten Loan Policy, Loan Application, and Promissory Note. See pages 7 and 8 of these release notes. An address block for employee notices (e.g. Automatic Enrollment, Automatic Rollover, Safe Harbor, and SIMPLE Notices), providing memo style To: line options. See page 9 of these release notes. For all pension plans (Defined Benefit (DB) plans, including Cash Balance plans, Money Purchase plans and Target Benefit plans), an ERISA sec. 204(h) Notice folder view screen for pension plans that are freezing, reducing, or terminating accruals, along with the corresponding folder view or batch print of the systemgenerated notice. See pages 10 and Error! Bookmark not defined. of these release notes. Retirement Plan Documents - Issues Addressed: Summary Plan Descriptions Added language in two places in the SPD for Cash Balance plan selecting item D2f (must earn a year of credited service to receive a pay credit), to disclose this requirement. Enhanced the Loan Policy to allow a named loan administrator, with contact information that differs from the employer or plan administrator. Excerpt from the DS 1.20g Release Notes 1

2 Employee Communications Enhancement for DC Plans We have redesigned eleven (11) DC plan administrative forms to have a cleaner appearance, be consistent from form to form, vary form language based on plan provisions, and allow you to customize the content of the form via a Forms Design Preferences screen under folder view. (In a future release, we will introduce redesigned forms for DB plans.) Forms continue to be printed from Batch Print, located under the Forms tab. However, before you can generate any of these forms for an employer s plan, you MUST complete the Forms Design Preferences screen under folder view. The eleven DC forms are: 1. Beneficiary Designation 2. Death Distribution 3. Deferral Election 4. Distribution 5. Hardship Distribution 6. In-Service Distribution 7. Loan Application 8. Loan Promissory Note 9. Permissible Withdrawal (for an EACA) 10. Required Minimum Distribution 11. Rollover Acceptance To the left, you see an example of the redesigned Beneficiary Designation Form. Please note the items requested under the Employee Information area: Name Truncated Soc. Sec. # Location These items were specified under the Forms Design Preferences folder view screen, illustrated below. Excerpt from the DS 1.20g Release Notes 2

3 In the Forms area under folder view, you will indicate the employer s preferences for the forms content. The selections on this screen, along with the plan options indicated on the adoption agreement or checklist, determine the text of the eleven forms. You will complete the Form Design Preference screen for each employer s plan that uses the DS employee communications administrative forms. Excerpt from the DS 1.20g Release Notes 3

4 Restructure of the SPD Folder View Area and Expense Policy Update With this release, we are introducing a new structure for the folder view SPD screen. Under the new structure, the selections for the various SPD-related documents appear on different tabs. Under , now the SPD screen contains two (2) tabs: Summary Plan Description Expense Policy The Summary Plan Description tab contains the options for information that appears only in the SPD Excerpt from the DS 1.20g Release Notes 4

5 Expense Policy Update On tab 2 - Expense Policy tab, you will make the selections and enter the fee information needed to prepare a policy that complies with DOL reg (a)-5-2. The Expense Policy screen provides the options for two general categories of expenses: General Administrative Expenses, such as accounting or recordkeeping fees. These are expenses that are NOT attributable to a transaction. Individual Processing Expenses, such as loan and distribution processing. These are transaction-based expenses, attributable to a participant. We will hold a webinar shortly after this release is published, to review the options and areas included on the Expense Policy tab of the SPD folder view screen. Excerpt from the DS 1.20g Release Notes 5

6 To the left, you see an example of a few sections from the updated Expense Policy. Note the amounts of the expenses entered on the folder view screen appear in the Individual Expenses area of the policy. Excerpt from the DS 1.20g Release Notes 6

7 Revision of Loan Materials The updated loan materials include additional options on the Loan Policy / Procedure folder view screen, which are then incorporated into the Loan Policy document. One significant change is the vested account balance is the only permitted security for the loan; no other security is permitted. The maximum loan amount can no longer exceed 50% of the vested account balance (reduced by outstanding loan balances). This means we have dropped the $10,000 option and that DS no longer contains a truth-in-lending statement, as now it is not possible to have loan provisions that would require one. As described above, under Employee Communications Enhancement for DC Plans, you must first complete the folder view Forms Design Preferences screen, in order to generate the updated Loan Application and Loan Promissory Note forms. Then, as under prior releases, you will select the forms from the batch print area. Though, now, Forms are found under the Forms tab. Excerpt from the DS 1.20g Release Notes 7

8 The content of the Loan Application Form is determined by the selections on the folder view Loan Policy screen and the Forms Design Preferences screen. Similarly, the content of the Loan Promissory Note is determined by the selections on the folder view Loan Policy screen and the Forms Design Preferences screen. Excerpt from the DS 1.20g Release Notes 8

9 Employee Notices Address Line ( To: ) Update We have enhanced the six (6) notices to allow you to specify the text to appear in the address line. The six notices are the: Automatic Enrollment Notice Automatic Rollover Notice QDIA Notice Safe Harbor Notice Sarbanes-Oxley Black-out Notice SIMPLE 401(k) Notice. On the folder view screen for any applicable notice, you may select (a) To All Eligible Employees or (b), and enter preferred text. To the left, you see an example of an annual safe harbor notice incorporating the To: text entered on the safe harbor screen for option (b). You may also select (b), and leave the text area blank, if you will be using the mailmerge function of your word-processing system to personalize the notice. Excerpt from the DS 1.20g Release Notes 9

10 ERISA Sec. 204(h) Notices With this release, we have added 204(h) Notices for pension plans that are reducing or freezing accruals. The selections you make on the General tab of the plan s adoption agreement or checklist, as well as the options on the 204(h) Notice folder view screen, drives the language of the system-generated notice. The 204(h) Notice screen appears in the folder view area Employee Communications for pension plans to which ERISA Sec. 204(h) applies: Nonhybrid DB, Cash Balance, Money Purchase, and Target Benefit. You will find suggestions for the reduction / freeze process under the second tab 2- Practitioner Notice. Please review these suggestions before generating a 204(h) Notice. (E.g. Step 1 create an amendment record.) IMPORTANT NOTES: We recommend that you generate the notice as.rtf (word processing compatible) output so that you can complete the customization of the notice. Also, you must attach an example or a benefit statement to the notice to show the effect of the change in formula. Excerpt from the DS 1.20g Release Notes 10

11 On the first tab 1-204(h) Notice, you will enter the dates, the formula information, and make other selections to generate appropriate text. HINT: For a reduction, copy the formula language from SPDs that you generate based on the prior formula and from the current amendment record and paste into the appropriate text boxes. To print the 204(h) Notice, or to generate.rtf (word processing compatible) output, select the Notice from the batch print Employee Communications area or click on the print icon from within folder view. Excerpt from the DS 1.20g Release Notes 11