403(b) Plan Service Provider Options

Transcription

1 Written Plan Document and Administrative Policies and Procedures in Service Agreement (SA) Document should provide contracts offered. If prior balances exist with other vendors, other vendor agreements may conflict with standard prototype of provider TPA.** in Service Agreement (SA) Document should provide consistent with contracts offered by all providers, but may focus on requirements of provider TPA. Other vendor agreements may conflict with standard prototype of provider TPA.** May not provide document services If document is, it should be Document providing contracts offered by all in Service Agreement (SA) Document usually as an individually designed document with contracts offered by all May not provide document services If document is, it should be Document providing contracts offered by all individually designed document Document will be Document with contracts offered by all SA should cover provider TPA s duties own contracts. May not be able to assist in obtaining such any prior ** SA should cover provider TPA s duties own contracts. May not be able to assist in obtaining such other ** but determine if will assist in obtaining May be - Determine if will assist in obtaining May be - Determine if will assist in obtaining Should be able to assist in obtaining agreements with Page 1 of 7

2 Plan Design Universal Availability Testing (Annual) Meaningful Notices of Eligibility (Annual) Some consulting may be available independence considered in SA If all employee data is by District under SA, testing performed. District should consider privacy issues and whether employee data is shared with agents of provider TPA. Usually provides a May offer service to distribute if District all employee data under SA. Otherwise, District must determine who must receive Some consulting may be available independence considered in SA If all employee data is by District under SA, testing performed. District should consider privacy issues and whether employee data is shared with agents of provider TPA. Usually provides a May offer service to distribute if District all employee data under SA. Otherwise, District must determine who must receive included in standard agreement as usually only receives information for employees remitting contributions Testing cannot be performed without complete employee data May provide a Usually, District will be required to determine who must receive Consulting services are usually included in standard agreement in SA If all employee data is by District under SA, testing performed. SA should provide all employee data will be kept private and not shared with third parties. Usually provides a standard or customized employee Usually distributes to all eligible employees based on universal availability testing, if District all employee data under SA included in standard agreement May not provide a If is, District will be required to determine who must receive plan design consulting conduct own testing standard or customized employee and can advise District how to determine who must receive Page 2 of 7

3 Contribution Limitation Testing (Annual) Transactional Review and Approval: - Distributions - Participant Loans - Hardship Withdrawals - Contract Exchanges Compliance Review / Auditing (Not required under regulations) - May be inaccurate due to lack of information from prior ** service for contracts held by provider TPA. Contract information for prior vendors must be supplied for review.** Usually not an included service - For any review, request a separate engagement with a qualified professional (Independence considered.) - May be inaccurate due to lack of information from other ** service for contracts held by provider TPA. Contract information for other vendors must be supplied for review.** Usually not an included service - For any review, request a separate engagement with a qualified professional (Independence considered.) - May be inaccurate due to lack of information if prior year data is not collected from all Usually not performed Usually not performed - Should collect prior year data from all providers directly to insure accuracy. Typically communicates directly with providers with no District involvement. If, is an add-on feature to SA - For review, require IRS representation for period reviewed and professional liability insurance coverage Compliance review is not usually Typically provides performance, quality and cost review of s offered by all vendors conduct own testing conduct own review May provide document and/or operational review correct any plan defects Page 3 of 7

4 District Fiduciary Liability for Choices (i.e. performance and quality of s) (No fiduciary liability imposed under regulations) typically in selecting vendor exercise prudence in selecting provider by performing due diligence review on at least annual basis, particularly if only one vendor is offered District may not have option to offer only one vendor in state with any willing provider statute typically in selecting vendors exercise prudence in selecting providers by performing due diligence review on at least annual basis District in state with any willing provider statute will need to follow selection policy that complies with state law typically in selecting vendors typically in selecting vendors exercise prudence in selecting providers by performing due diligence review on at least annual basis District in state with any willing provider statute will need to follow selection policy that complies with state law Usually provides review of performance, quality and cost of s offered by current vendors and vendors not currently offered and recommends vendors and products to offer District may consider such expert review and recommendation in its annual due diligence review and selection of offered vendors District in state with any willing provider statute will need to follow selection policy that complies with state law District on potential and guidelines to follow in adopting procedure for review and selection of offered vendors District in state with any willing provider statute of selection policy to follow that complies with state law District with written policy selection of products and vendors Page 4 of 7

5 Employee Education (Not required under regulations) Usually Focus may be more product based. expanded fiduciary liability if individual counseling is. Usually Focus may be more product based, expanded fiduciary liability if only products discussed are those by provider TPA. Specific information products by all No individual counseling should be. Usually Focus on overall benefit of retirement savings and general education. Specific information products by No individual counseling should be in order to limit potential expanded for District. May be Focus on overall benefit of retirement savings and general education. Specific information products by No individual counseling should be in order to limit potential expanded for District. District on procedures to follow in providing employee education in order to limit potential expanded fiduciary liability. * A third party administrator (TPA) generally provides plan documentation and operational services to the employer. ** providers may not share information with other providers due to proprietary reasons. to act as an intermediary to collect information. The purpose of this chart is to describe services typically offered by each type of service provider as an initial reference guide to assist the reader in distinguishing between service However, each service provider is different. Some providers may not offer services typically in their industry, while others may offer services in addition to those typically. The reader Page 5 of 7

6 is cautioned to ask questions and carefully review the provider s service agreement in order to determine the specific services that will be under the agreement. Also note, this chart does not list all operations that must be performed for a compliant plan. Copyright 2007 Gatekeeper Administration & Consulting LLC. All rights reserved. This information is general in nature and is not intended to constitute legal or tax advice or opinion in any particular situation. The reader is advised to consult with legal counsel and/or a tax advisor to determine how the applicable laws apply to the reader s specific circumstances. Page 6 of 7