EGTRRA Restatement Frequently Asked Questions (FAQ)

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1 EGTRRA Restatement Frequently Asked Questions (FAQ) Plan Provision Changes / Amendment Freeze When is the amendment freeze? Up to October 1, 2008: Contact your plan services consultant with any requests for amendment that must be in place prior to year-end. October 2, December 1, 2008: Limited requests for amendments will be processed. Acceptable requests include: Safe Harbor- adding, removing or changing the employer contribution formula Plan year changing the plan year (e.g., from a 1/1 anniversary plan to some other date) Automatic enrollment- adding or removing the feature Contribution allocations- changing requirements (e.g., adding a last day requirement) Forfeitures- changing allocation method (e.g., reduce instead of allocate) Cross tested plans- changing the rate groups Compensation- changing definition (e.g., removing exclusions from compensation) Eligibility Exclusions - (e.g. removing/adding groups from being eligible for the plan) Note: Any requests received during this time frame for a plan wanting to make a change that is on the list as well as changes not on the above list, ONLY the year-end required amendment request will be drafted. After December 1, 2008 to until signed EGTRRA restatement document received: In order to produce an accurate restated document, no amendment requests will be processed during this timeframe. What if I want to add Safe Harbor provisions to my plan? Requests to add Safe Harbor provisions to the plan will be accepted until December 1, The standard Safe Harbor submission rules still apply. Until noon Monday, November 10, 2008: We can prepare the plan amendment and the initial Safe Harbor Notice November 10, 2008 December 1, 2008: We will still be able to create the plan amendment, but you will receive the Safe Harbor Notice from our Regional Office.

2 Can you make an exception for my plan and prepare an amendment? Up to December 1, 2008: If you think there is a compelling reason to consider amending, discuss with your plan services consultant. Your consultant will discuss with their supervisor. Exceptions will be made for only those situations that are deemed to be an absolute necessity. If an exception cannot be granted, we will work with you to discuss alternatives. After December 1, 2008 to until signed EGTRRA restatement document received: In order to produce an accurate restated document, no amendment requests will be processed during this timeframe. The amendment freeze sounds like something to benefit AUL, how does the fact that you will not prepare an amendment benefit me? It is common among service providers to institute an amendment freeze for major legislative restatement events. Without the freeze, we cannot ensure that we provide a quality restatement that includes the provisions requested as a part of the amendment. While some amendments may seem simple, amendments processed between the freeze and the restatement could cause significant plan issues. It is critical that we have in place every precaution to ensure no cut backs or problems in plan design occur. Our top priority is providing a quality restatement, which requires no exceptions to the amendment freeze. Can I submit a plan amendment request now even though I realize it will not be sent to me until after I return my EGTRRA restatement? Yes, please contact your plan services consultant. Plan Information Questionnaire (PIQ) / Restatement Processing What is the Plan Information Questionnaire (PIQ)? The PIQ will be mailed to you in March, April or May of A primary reason for the PIQ is to verify that certain information in your plan document is up-to-date. The following information will be listed on the PIQ for you to verify or correct as necessary: Employer Name, Address, Telephone #, EIN#, Type of Entity Affiliated Employer(s) (i.e., controlled group and/or affiliated service group employers) Plan Trustee(s) Your PIQ may contain additional questions for you to confirm or answer. This is possible because of the following reasons: New choices are available in the document, and/or Incomplete or conflicting information on your current document

3 Data validation issues when the data is transferred to the new document generation database It is important that you answer any additional questions that may appear on your PIQ. If any question is left blank, it will cause a delay in preparing and mailing your EGTRRA restatement. The PIQ needs to be returned even if no corrections or markings are made on it. It will serve as your authorization for us to proceed with processing your EGTRRA restatement. Additionally, the receipt of your PIQ will determine whether you meet the deadline to receive the early bird discounted restatement fee. After receipt of the PIQ, you will be billed based on the receipt date. Therefore, you should review, verify/complete and return the PIQ as soon as possible after you receive it to qualify for the discounted rate for restatement. Why is the PIQ needed? The PIQ is needed to make sure your EGTRRA restatement is as complete and accurate as possible. Plus, it is your way of telling us that you want us to prepare the EGTRRA restatement for your plan. Once the PIQ has been returned to us, your EGTRRA restatement will be prepared on a first-come, first-served basis. Please keep in mind that any unanswered questions or write-ins of additional change requests will cause a delay in preparing your EGTRRA restatement. Can I make changes to my PIQ? Certain information on the PIQ is specifically meant for you to review and make changes as necessary. For example, we need you to verify your employer name, address, phone number, EIN#, type of entity, the plan trustee(s) and any Affiliated Employers. You may make changes to those items as necessary. Also, there may be questions on the PIQ that you must complete for us to prepare your EGTRRA restatement. Making additional notes or requesting changes to existing plan provisions not located on the PIQ will cause a delay in preparing your EGTRRA restatement. If you want to make a change to your plan, we recommend the following: Thoroughly complete and return your PIQ as quickly as possible upon receipt. Your restatement will be prepared and mailed to you on a firstcome, first-served basis. Once you receive your restatement, review, sign, date, and return it immediately. Once we have notified you that your restatement has been received, you may request a plan amendment through your plan services consultant.

4 Can you prioritize my restatement? Your EGTRRA restatement will be prepared once you return the PIQ. Then, your EGTRRA restatement will be prepared on a first-come, first-served basis. I have misplaced the self-addressed postage-paid envelope you provided to return my PIQ, where do I send it? Please send your PIQ to the following address: American United Life Insurance Company, PO Box 48000, Jacksonville, FL Or, you may fax it to: (904) I did not make any changes or markings on my PIQ. Why do I need to return it? The PIQ must be returned even if no changes are required. Our receipt of your PIQ will serve as your authorization for us to proceed with processing your EGTRRA restatement. I have a question on my PIQ that is already completed with an answer. What should I do? If you have a question on your PIQ that already contains answer, please verify the answer(s) is/are correct. Make corrections, as necessary. The PIQ is asking if the Affiliated Employers are members of a controlled group or affiliated service group. How do I know that answer to this question? The determination as to whether or not you are part of an affiliated service group, controlled group or a group of trades or businesses under common control is very complex and extremely important for the accurate restatement of your plan. Legal assistance should be attained in order to make this determination. Fees and Billing Why am I being charged to restate my document? For routine plan or contracts amendments at your request or occasional legislative plan amendments, we do not assess any fees. For major legislative restatements impacting all sponsoring employers of qualified plans, a portion of the costs associated to keep your plan in compliance with the regulatory bodies is passed on, these are: Document generation vendor fees to prepare your restated document Mailing and printing costs IRS fees incurred to receive document approval

5 When will I receive the bill for the EGTRRA restatement? Approximately days after receiving your PIQ, we will prepare and mail your EGTRRA restatement billing. I ve never been charged before for plan changes, why am I being charged now? At the point of sale, the installation fee paid covers the cost of document preparation. For routine plan or contracts amendments at your request or occasional legislative plan amendments, we do not assess any fees. In looking back at the prior two major legislative restatements, the Tax Reform Act of 1986, which required plan restatements completed by 1994, and the GUST legislation requiring plan restatements by 2003, fees were assessed. Can the restatement fee be deducted from the plan? If your plan document allows for payment of expenses from the forfeiture account, you may elect to pay the EGTRRA restatement from the plan. Also, you could elect to pass on the restatement fee to your participants. The fee would be deducted from the participant's account on either a pro-rata or percapita basis as instructed by the plan administrator. What allows AUL to charge a fee for the EGTRRA Restatement? The Administrative Services Agreement (ASA) provides for a Plan Amendment or Restatement Preparation Fee under the sub-heading "Optional Services." Can I pay my fee now? We are notifying you of the fee now for your 2009 planning purposes. The actual bill for restating your plan will be mailed to you in 2009 after we receive your completed and signed Plan Information Questionnaire (PIQ). The date we receive your PIQ will determine whether you qualify for the reduced rate based on early receipt. Therefore, you should complete and return the PIQ as soon as possible after you receive it to receive the discounted rate. My contract wasn t effective until early in 2008, why do I have to pay to restate already? We created your original document and any required legislative amendments in 2007 at no cost to you. The charge for restatement is offsetting only our associated costs. My plan was accepted by AUL on or after January 1, Will I have to pay an EGTRRA restatement fee if I do not return my PIQ timely? Yes. If your plan was accepted by AUL on or after January 1, 2008, you will not need to pay for the EGTRRA restatement as long as you return the PIQ within approximately the first 5 months after it was mailed to you. However, if your PIQ is returned later than 5 months after it was mailed to you, your EGTRRA restatement fee will be $1,999.

6 I m a small business and why do I have to pay what other larger plans pay? The cost associated with restating your plan is not related to the size of your company or plan. We are deferring only our costs related to the restatement in order to maintain our position that we not charge for routine required legislative amendments and amendments that you request to change your plan and/or contract. Communication How will AUL contact me? You will receive communications related to your restatement via various mediums. First, you should have received an initial communication by mail. The Plan Information Questionnaire (PIQ) and final restatement will also likely be delivered by mail. Second, you may receive s related to your plan document from the following account: LegislativeUpdates.RS@oneamerica.com. Please ensure that you do not block s from this address. Finally, we will continue to publish articles in the Plan Sponsor Monthly publication. Plan and Contract Terminations Does a terminating plan need to be updated for EGTRRA? A terminated plan should be updated for the most recent IRS-published Cumulative List of Changes in Plan Qualification Requirements ( Cumulative List ). The most recently published listing is located in IRS Notice This listing is what the IRS would look for when issuing an opinion, advisory or determination letter. So, if a terminating plan files an IRS 5310 upon termination, the IRS will be looking not only for EGTRRA updates, but any other updates that may be listed on the most recent Cumulative List. Will AUL prepare my plan termination amendment so that a plan is updated with the most recent Cumulative List published by the IRS? At this time, AUL does not prepare plan termination amendments. As described in the previous question, this often entails more than what is required for current or existing prototype plans. If I wait to terminate my plan until after adopting the EGTRRA restatement, will it be up-to-date for the most recent Cumulative List? Maybe, but not likely. Generally, EGTRRA plan documents for prototype-users were updated as of the Cumulative List published in 2004 (IRS Notice ) as required by the IRS. Since that time, there has been other legislation such as the Final 415 Regulations (for which our prototype plans have been updated) and the Pension Protection Act (for which our prototype plans will be updated sometime in 2009.) Again, it will depend on what is required by the most recent Cumulative List published by the IRS at the time of plan termination.

7 What if I am terminating my contract with AUL and moving my plan and assets to another carrier - who will be preparing my EGTRRA restatement? The plan will still need to be updated for EGTRRA. Your new carrier will most likely be updating your plan for EGTRRA legislation either upon transfer to the new carrier or by the IRS-mandated deadline. Generally, AUL will only update your plan for EGTRRA if your contract has not terminated and paid out prior to our mailing of the EGTRRA plan document. What if I received the EGTRRA Initial Client Mailing and terminate my contract with AUL before receiving the Plan Information Questionnaire (PIQ)? If you terminate your contract and the assets are paid out before the PIQs are mailed, we will not be offering EGTRRA restatement services to you. The recent EGTRRA Initial Client Mailing was not an official offer to prepare the EGTRRA restatement; instead it was just an informational letter to give you an idea of what is to come regarding the EGTRRA restatement process. Why did you send me a PIQ when I terminated our contract with AUL? Your plan may have terminated after the point in time where we identified all plans needing a PIQ. Please disregard the PIQ. What if I return my PIQ and terminate my contract before receiving the EGTRRA restatement? Our PIQ will indicate that if you terminate your contract and/or services agreement with us after returning the PIQ, we will not be responsible for the preparation of your EGTRRA restatement. What if I pay the EGTRRA restatement fee and then terminate my contract before receiving the EGTRRA restatement? To the extent possible, we will stop the restatement process for your plan. If we are able to do so, the fee will first be applied to any other outstanding AUL bills. Any excess will be refunded to you. However, if we are already in the process of mailing your restatement, you will receive the EGTRRA restatement and your fee will not be returned. Mergers Our plan has not been restated for EGTRRA yet. We want to merge our plan with another plan that already exists at AUL or another plan outside of AUL. How will this affect our EGTRRA restatement? And, does the normal EGTRRA restatement fee still apply? If you are merging your plan with another plan (whether or not AUL currently provides document services for such plan), and you request that AUL prepare

8 the plan merger documents, we will restate your plan onto an EGTRRAcompliant plan document as a part of the plan merger process. You will be charged $499 for restatement to an EGTRRA-compliant plan document as a part of the plan merger process. Updated March 25, 2009