Inside. 4. Hosting 2 TPA Forums in 2003

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1 Vol. 2, No.1 / First Quarter 2003 The Newsletter for Transamerica Retirement Services Third Party Administrators Message from the Director the start of a new year. How exciting! We at Transamerica Retirement Services (TRS) are looking forward to a banner year. We ended 2002 on a high note and plan to maintain that momentum throughout this year. TPA Services is a primary focus for TRS growth in 2003, with expectations for great success Building TPA Services 2002 was a building year for TRS TPA Services. Our main goal was to establish recognition of TRS as a major player within the TPA Channel. Kathy Del Corso-Chase (TRS Eastern Region TPA Specialist) and myself became seasoned road warriors last year. We visited over 100 TPA firms nationwide and attended 4 major industry conferences and we didn t even hit the road until March! One of the most exciting events in 2002 for TRS was hosting our first TPA Forum. The event took place last November at the Ritz-Carlton, Marina del Ray, California. (You can read all about the TPA Forum on page 8 of this newsletter.) Besides logging the miles, we created the TPA Services Guide, developed a new TPA Web site, new TPA marketing materials...and most importantly of all, implemented an Internet-based method for TPAs to download data from our recordkeeping system. We feel we have built a strong base on which to build a successful A Year of Partnership 1. TPA Training To provide instruction to assist you with the day-to-day operations and interface with TRS through web cast conference calls, s and conference calls and regional meetings for a days worth of training. 2. TPA Web site enhancements for easier access to more data 3. Increased TRS TPA Services presence at all the major industry conferences Inside Hosting 2 TPA Forums in 2003 This month s Meet the Staff section highlights four individuals from our New Business Installation (NBI) department. I am sure that many of you have had the pleasure of dealing with Cindy, Heidi or Dora as a new client is being set up. We have also included an article by Marisa Lopez, the NBI Manager responsible for TPA Services clients this article outlines everything NBI does to make the transition to TRS for the Client and you go smoothly. I believe that the breadth of service that NBI provides is one of the major benefits of partnering with TRS. Enhanced Partner Series Proposal We are in the process of enhancing our Partner Series Proposal to include a special TPA tab. This tab is designed to incorporate your fee schedule and firm s marketing profile to allow us to present our combined services as a team. You will be hearing from a representative of our Internal Sales Desk requesting New Recordkeeping Fee Waiver TPA Services Guide Meet the Staff ERISA Corner: Revenue Procedure (Continued on page 2) ERISA Corner: Revenue Procedure NBI Solid Relationships, Superior Results! TPA Forum

2 (Continued from page 1) this information. This will also give our Internal Desk the opportunity to introduce themselves to you...since you will be working closely with one another during the proposal process in the future. It is our goal to be your vendor of choice Transamerica Retirement Services is committed to providing outstanding TPA services and to a significant growth strategy for 2003 and beyond. I welcome any suggestions you may have that will make working with TRS easier and will make TRS your vendor of choice. I look forward to hearing from you! New..Recordkeeping Fee Waiver! Effective January 1, 2003 We have implemented a Recordkeeping Fee Waiver. For all new plans with $500,000 in assets and an average minimum account balance of $10,000, all TRS Recordkeeping Fees and Distribution Fees will be waived! This feature will make the Partner Series Product easier to explain to a potential client the only Recordkeeping fees charged will be the TPAs. TPA Services Guide We are pleased to announce our new TPA Services Guide. The new guide is a comprehensive document that will provide you with all the information your office will need to work with Transamerica Retirement Services, including forms for processing Participant loans and distributions. All TPAs will soon be receiving the new guide in the mail. The Services Guide is now available for viewing or downloading from our TPA Web site at You will be notified of any changes to the guide in the future via , and you will be able to access the updated documentation via the Web site. 2

3 M Meet the Staff Marisa Lopez joined Transamerica Retirement Services in April of 2000, and serves as the Lead Project Manager in our New Business Installation (NBI) department. Her job focuses solely on business generated by our TPAs and Preferred Producers. Prior to joining TRS, Marisa worked at a large third-party administrator in Southern California for seven years so she is very familiar with the needs of TPAs. In addition to overseeing the installation operations of her team, Marisa is a key presenter at various TRS-sponsored seminars, such as Retirement Services University and the TPA Forum. Cindy Chau has worked for Transamerica Retirement Services since February of As a Project Manager with our NBI department, her responsibilities include assuring that a new case meets or exceeds our established installation timeframes, including management of the takeover process for our TPA business. Cindy also served on the original committee that designed our Partner Series product, and was instrumental in its introduction to the TPA channel. Prior to joining TRS, Cindy provided large case installation services for a local third-party administrator. Heidi Duarte is a true Transamerica veteran! She began her career at Transamerica Retirement Services in November of 1995, and joined our NBI department in August of Prior to joining NBI, Heidi was a Plan Coordinator in one of our call centers and earned her stripes as an expert in customer relations. As one of our Project Managers, Heidi works directly with both new and takeover cases generated by our TPA channel, and is responsible for the timely installation of retirement plans generated by our TPA relationships. Dora Seffel began working at Transamerica Retirement Services New Business Installation in December of Dora has over 13 years experience in plan recordkeeping, installation of defined contribution plans, project management and plan administration. As a Project Manager, Dora is responsible for the timely and accurate installation of TRS plans, both new and conversion; making sure the installation meets our TPA Services standards. Dora is a member of the LA Chapter of NIPA and the WP&BC. Dora has her Series 6 and Series 63 Licenses, and a Life Agent License for the State of California. 3

4 ERISA Corner by Emily Urbano, Vice President Plan Compliance Revenue Procedure : Waiver of 60-Day Rollover Deadline Background EGTRRA amended Code section 402(c)(3) effective for distributions made after 12/31/01. It authorized the Secretary of the Treasury to waive the 60-day deadline for rolling over a qualified distribution in special hardship situations where the failure to waive would be against equity or good conscience, such as, in the case of a casualty, disaster, or other event beyond the reasonable control of the individual making the rollover. Revenue Procedure is effective 1/27/03 but applies to distributions made after 12/31/01 from an individual retirement plan under Code sections 408(a) or (b), a qualified 401(a) plan, 403(a) annuity plan, 403(b) tax-sheltered annuity plan and a 457 eligible governmental plan. This Revenue Procedure provides relief to taxpayers and financial institutions alike by extending the 60-day deadline in these special situations. The granting of waivers will facilitate rollovers and save taxpayers (who did not satisfy the 60-day requirement) from adverse tax consequences. Highlights of Revenue Procedure There are 2 types of waivers: (1) automatic and (2) application - by applying to the IRS. 1. Automatic waiver: No application to the IRS is required if the reason the rollover was not made in time is because of an error on the part of the financial institution, provided: Financial institution receives the rollover before the expiration of the 60-day rollover period; and Taxpayer follows all procedures required by financial institution for depositing rollover funds within the 60-day period; and Solely due to an error on the part of the financial institution, funds are not deposited within the 60-day period. Automatic waiver will apply only if the rollover funds are eventually deposited into an eligible retirement plan within 1 year from the start of the 60-day rollover period, and, but for the error, the financial institution had deposited the funds as instructed. 2. Application to the IRS: Taxpayer must apply for a hardship exception and pay a user fee (generally $90.00) (Rev. Proc ) Taxpayer must use same procedure as in making an application for a letter ruling (Rev. Proc ) IRS will issue a ruling waiving the 60-day rollover requirement using all relevant facts and circumstances, such as: Errors committed by financial institution Inability to complete a rollover due to death, disability, hospitalization, or incarceration Restrictions imposed by a foreign country Postal error Whether the check is cashed; and/or The time elapsed since the distribution date To be eligible for the waiver (whether automatic or through application to the IRS), the amount eventually rolled over must equal the original amount of the rollover. 4

5 Revenue Procedure : Deemed IRAs The IRS issued its first guidance on Deemed IRAs in Revenue Procedure The IRS and the Department of Treasury expect to issue proposed regulations in the near future. Background on Deemed IRAs EGTRRA added Deemed IRA provisions to the Code effective for plan years beginning after 12/31/02. Under the Deemed IRA rules, employers, rather than employees, assume the burden of setting up IRAs. The thought was with the IRAs already set up, employees will more likely contribute toward their retirement through the convenience of payroll deduction. Deemed IRAs do not count against any of the other qualified plan contributions and limits, and, although subject to ERISA s exclusive benefit and fiduciary rules, they are not subject to ERISA s reporting and disclosure, participation, vesting and funding requirements. Deemed IRAs must meet the traditional or Roth IRA rules as well as the reporting requirements for IRAs. Highlights of this guidance: Deemed IRAs can be maintained within a qualified plan (401(a), 403(b), or governmental 457) The IRA contribution and deduction limits and taxation of distributions apply A Deemed IRA contribution must be designated as such on or before the time the contribution is made The qualified plan must allow after-tax employee contributions Deemed IRA contributions must be held in a trust separate from the trust holding qualified plan contributions Separate record keeping of Deemed IRA contributions is required Plan Sponsor must have a signed good faith EGTRRA amendment for Deemed IRAs in place by the end of the GUST remedial amendment period Plan must be amended to add Deemed IRA provisions (transitional rule allows plans to operate during the 2003 plan year without an amendment, provided the amendment is in place by the end of the 2003 plan year) Deemed IRA (product) must be in place by the time the first contributions are accepted IRS has provided a sample plan amendment IRS requires IRA provisions that satisfy Code section 408 (traditional IRA) or 408(A) (Roth IRA) to also be in the plan document Deemed IRAs are optional so a Plan Sponsor election must be provided in the adoption agreement It appears Deemed IRAs are not subject to coverage and discrimination testing The IRA Trustee or issuer of the annuity will be subject to the IRA reporting requirements of Code section 408(i) Impact of Deemed IRAs: Allowed under a qualified plan funded with a registered product Consolidated investing for employees Increases plan assets Simplifies the savings process for employees Subject to regs., could provide the vehicle for capturing qualified plan rollovers Subject to regs., could serve as a default IRA for qualified plan distributions between $1,000 to $5,000 (Continued on page 7) 5

6 NBI Solid Relationships, Superior Results! The New Business Installation Team Offers Superior Service, Comprehensive Support & Unique Services The NBI Mission: Comprehensive Service and Support The New Business Installation (NBI) team is a key factor in the success of Transamerica Retirement Services TPA Services. A quick look at the team s responsibilities reveals just how much service and support is integrated into their work day! The NBI team s work agenda includes 6 Establishing and maintaining a relationship with Clients, Producers and TPAs Coordinating enrollment kit production Ensuring accurate generation and execution of Contract Educating clients on contribution remittance process Coordinating the transfer of assets and reconciliation Reconciliation of outstanding Participant loans Tracking accurate and timely installations at TA East Coordinating overall installations with TPAs Keeping producers and TPAs informed What can a first time Client expect? Well for starters, they ll receive an Installation Guide, a Welcome call, an Installation/Planning call, enrollment kits, and assistance with remitting Plan contributions and with the transfer of Plan assets. As part of their top-notch service to their Clients, the NBI team also offers customized installation support such as Customized Employee Announcement for new plans/transition Memo for takeover plans Termination/Liquidation Letters for takeover plans Fund Mapping Participant Memo for takeover plans NBI Makes the Conversion Process Easy If the Fund Mapping feature is selected, the NBI team performs Fund Mapping as part of their commitment to making the conversion process hassle-free! The Fund Mapping service includes: A customized memo to the Sponsor Setting expectations with prior investment provider regarding required reports Ensuring assets are properly mapped into TRS Funds Transfer of Assets the TRS advantage As a unique service offered to the TPA business community, the NBI team will also handle these aspects pertaining to the transfer of assets: Coordinating timing of the transfer with prior Recordkeeper and investment provider Ensuring receipt of assets and Participant level records from prior provider Reconciling and allocating assets at the Participant level Ensuring PINs are mailed to Participants Quality Service with NBI Client, Producer & TPA Surveys The NBI team is constantly striving to improve the service and support they provide. NBI performance surveys focus on the following areas: Commitment to efficiently completing the Plan s Installation How well NBI kept the Client and the TPA informed during the installation process Reports on the responsiveness of the Project Manager Timeliness of the installation Measuring the quality of the support during the installation

7 Keeping You in the Loop Offering you, the TPA, the best service and support won t do you much good unless you know about it! That s why the NBI team goes to great lengths to keep you informed with the TPA Welcome Letter our way of involving you as a new client begins the installation process TPA Update Letter provides updates at interim stages of the installation Great News Letter informing you of your Client s response to our Quality Assurance Survey The New Business Installation team is committed to helping TPAs and their Clients receive the highest quality of service and support possible. Marisa Lopez, Lead Project Manager, is proud of her team s commitment to delivering that goal, We re simply the best, and we re constantly striving to do more! You can contact NBI via our toll-free number: 1 (800) x5557 ERISA Corner (Continued from page 5) Could reduce the overall cost of plan investments Great substitute for traditional after-tax employee contributions since it appears there is no discrimination testing and 415 limits do not apply Subject to regs., Deemed IRAs could benefit from the qualified plan s anti-alienation rule, thus, Deemed IRA assets could be protected from creditors Deemed IRA contributions will be subject to the IRA aggregate contribution limits ($3,000 for 2003) Subject to regs., catch-up contributions could apply ($500 for 2003) Would appear to require consolidated record keeping capabilities from a service provider Outstanding Issues: We expect future guidance to address the following issues: If Deemed IRAs run afoul of the IRA rules, e.g. in operation, would the qualified plan be negatively impacted? What disclosure and election requirements apply? Can excess IRA contributions be reclassified or must the plan be purged? Would excise taxes apply? Would Deemed IRA contributions be available for Participant loans? How would Deemed IRA contributions be treated for Form 5500 reporting? What rules apply to prototype and volume submitter plans that choose to include Deemed IRAs? Our IRS contact has indicated that additional guidance will be issued later this quarter. We will notify you via and update the Web site as soon as we have more information. 7

8 TPA Forum Our first TPA Forum was held on November 6, Seventeen TPA Firms were represented, with 27 people attending. We had a great group of attendees with representation spanning the country and made up of firm principals as well as Administrators. We began the event with a cocktail hour and dinner on Wednesday evening, which gave everyone the opportunity to get to know one another. We met all day Thursday the 7th and half the day on Friday. The topics included the Sales process, New Business Installation, Client Management, Processing, Marketing, the TPS Web site and download functionality. Thursday evening was spent partying on a dinner cruise in the Marina del Rey Harbor. The home office staff was also invited so everyone would have the opportunity to get to know one another we all had a great time. We were very pleased with the outcome, and the attendees left with nothing but praise. We received comments such as you didn t waste our time, you covered exactly what we need to know, this was the most comprehensive vendor event that I have ever attended, I appreciate that TRS is willing to listen and be flexible to changes that will make our jobs (as TPAs) easier and this event legitimized Transamerica. The great feedback and input throughout the event was invaluable. TRS has already implemented many changes to incorporate the suggestions made! The TPA Forum was so successful that we plan to hold 2 Forums this year in Spring and Fall. We look forward to these events and would love to see you there! ASPA 401(k) Sales Summit TRS will be exhibiting at the upcoming ASPA 401(k) Sales Summit in Scottsdale, AZ on February 27 through March 1. Please stop by and say hello! 8 Editor: Annie Muir TRS