Chapter Three Contribution Remittance

Chapter Three Contribution Remittance Chapter Three Highlights Now that the enrollment process has taken place and all of the appropriate forms have been completed, the next step is to establish deductions on your payroll system and submit contributions and Participant contribution data to TRS. Employee Deferral Contributions must be made to the plan as soon as administratively feasible but in no event later than the 15th business day of the month following the month in which they have been withheld from the Employee s paycheck. There are two important elements when submitting contributions: Element 1: Contribution Data (Use one of the three methods) www.ta-retirement.com 31/2 diskette Contribution Report (via hard copy) Element 2: Contribution Remittance (Use one of the four methods) Automatic Clearing House (ACH) Collection ACH Payment Wire transfer (money wire) Check This section provides detailed instructions for the various contribution data and remittance methods. Contents 3.1 Data in Good Order 2 Page 3.2 Contribution Data via Internet 3-4 3.3 Contribution Data via Diskette 5 3.4 Contribution Data via E-mail 6 3.5 Catch-up Contributions 7 3.6 Formatting Instructions 8-9 3.7 Contribution Remittance via ACH, 10 Wire or Check 3.8 Use of Forfeitures 12-13 Sample ACH Form 14 1 Transamerica Signature Service

3.1 DATA IN GOOD ORDER A remittance that is incomplete will be given an effective date as of the date it is considered to be in good order. Good order means... Contribution Data is received prior to or with your deposit. Contribution Data is equal to the deposit amount remitted. The remittance (check, wire, ACH) is properly identified by its contract number. See Section 3.7 for complete details for each remittance type. All contributing Participants are identified by name and Social Security Number. All enrollment forms have been received prior to the first contribution. Remittances in good order will be processed in accordance with the timing standards stated in your service agreement. A remittance is considered not in good order when... Remittance details are missing. Details and deposit amounts do not balance. Participant information is missing (i.e. name, Social Security Number). The remittance requires data manipulation prior to processing of the diskette or Internet file. The remittance includes contributions for Participants who are not enrolled. Negative contributions are received that cannot be supported. Incomplete remittances will be effective as of the date the remittance is considered in good order, which means all necessary corrections have been made and/or information has been provided, so that the remittance can be processed accurately. If TRS receives a remittance that is not in good order, we will contact you to review remedial steps. See Section 3.7 for additional information. 2 Transamerica Signature Service

3.2 CONTRIBUTION DATA VIA INTERNET Remittance of Plan Contributions Transamerica Online allows you to easily submit Participant allocation reports electronically, which is an important component of managing your retirement plan. Transamerica Retirement Services relies on the timely, accurate submission and reporting of Participant contributions to efficiently allocate Participant funds. How Does It Work? With your personal computer and access to the Internet, Transamerica Online allows you to send your contribution data electronically and automatically transfer your funds via ACH. When your submission is received, an electronic confirmation will appear on your monitor. This process prevents mail delays and overnight charges and also expedites the allocation of your payroll contributions into the retirement plan. It's that easy. Using the TRS Web site TRS uses an Internet HTML file transfer facility, which can be used by Plan Sponsors to send transaction files from their computers to TRS. If you elect to use TRS s Web site, no contribution remittance charges will apply, even if you remit contributions weekly. To use TRS s Web site you must have: Access to the Internet Access to and knowledge of the full path name of the file(s) being sent from your computer system, for example: C:\401K\TRANS\CONTRIBS.DAT Sending a file is a simple process: Step 1: Using your browser, go to http://www.ta-retirement.com Step 2: Enter your Username and Password. Click on the icon Step 3: Select Plan Administration Step 4: Select Payroll Contributions Step 5: Enter the required information on the Payroll Contribution page including the file to upload. For file to upload, enter the full path name of the file to be sent or click on the Browse button and select the file. Step 6: Click the Upload button. 3 Transamerica Signature Service

3.2 CONTRIBUTION DATA VIA INTERNET CONT. When the upload is finished, you will be presented with a completion screen and confirmation that the file has been received. At this point, you can either close the current window or click on the Upload Another File button to send another file. You cannot write over or send the same file name again until the first file has been removed from the upload directory by TRS personnel. HTML file transfers require a reasonably current browser. If you use Internet Explorer it must be 5.5 or above. If your browser is Netscape Navigator, it must be 6.0 or above. If the upload site window fails to function properly, check the level of your browser. If necessary have your network administrator upgrade your browser. Complete formatting instructions for the file are found on pages 8 9 of this chapter. For check deposits, please screen print the confirmation screen and attach the copy to your check. 4 Transamerica Signature Service

3.3 CONTRIBUTION DATA VIA 3 1/2 DISKETTE Please use the following guidelines for diskette submission: Diskette Size/Format: 3.5 IBM-PC compatible File Types: Lotus or Excel (.wk1 or.xls files extension) Detailed formats for each File Type are on the following pages. General Items: 1) A printout of the file (or an equivalent file with headings and/or totals) should be sent along with the diskette to confirm totals and resolve any questions regarding the data. 2) We prefer that the diskette file be named using the month, day, and year of the payroll period to which it applies (i.e. 083197.wk1). The file may have any name if the payroll month, day and year are indicated on the printout or the contribution check stub. 3) The file should have as an extension (last four letters of the name) a. followed by the letters listed in the File Types section above. 4) A check made payable to Transamerica Retirement Services, the diskette and a hardcopy printout of the information contained on the disk should be sent to: Transamerica Retirement Services Attn: Remittance Department 8488 Shepherd Farm Drive West Chester, OH 45069 5 Transamerica Signature Service

3.4 CONTRIBUTION DATA VIA E-MAIL Please refer to the following guidelines for E-mail submission: 1) Refer to Bank Wire Instructions. 2) Wire plan contributions to investment provider for deposit into investment contract. 3) Select one of the above file types identified under diskette submission and create your contribution file in the same format. 4) Generate an E-mail and attach your contribution file. Be sure to include the name of the plan, contract number / account number (supplied by investment provider) and the pay date for which the contributions are to be processed. 5) Please send your file to Remit@transamerica.com. 6 Transamerica Signature Service

3.5 CATCH-UP CONTRIBUTIONS Catch-Up Contributions: Employers can allow Plan Participants age 50 and older to contribute an additional $1,000 per year on a pre-tax basis. Please refer to your Plan Document to verify that this provision has been updated. The amount will increase annually, reaching $5,000 in 2006. After 2006, the $5,000 limit is subject to cost of living increases. Catch-up contributions will not be subject to discrimination testing or other contribution limits. Employee maximum deferrals allowed under the Plan or by law must be reached before any deferrals can be considered as catch-up contributions. Contributions will be recharacterized as "catch-up" upon attainment of the limit. For example, if your Plan allows for a maximum employee deferral of 10% of salary, then the Participant must first contribute the lesser of 10% of their salary, or $15,000 (in 2006) before permitted to make catch-up contributions for that year. Employer Submission of Catch-Up Contributions: At the end of the Plan year, total Participant deferral amounts will be compared to the maximum limits allowed under the Plan or by law. If the combined amount does not exceed either of these limits, the total deferrals will be treated as regular deferrals for the year. If, however, there is an excess amount, that excess will be recharacterized as a catch-up contribution for eligible Participants. Please see the details under our "Formatting Instructions" section in this chapter. Employers who elect to provide a matching contribution on the catch-up contributions should coordinate this with their payroll provider as well. 7 Transamerica Signature Service

3.6 FORMATTING INSTRUCTIONS The following two formats are appropriate for contributions sent by either TransAccess, diskette, or E-mail: Lotus / Excel (.wk1 or.xls) file types 1) Each row of the spreadsheet is an individual contribution record. 2) The spreadsheet cannot have headings or totals. 3) The spreadsheet must have the first four (4) columns as listed below: Column A - Social Security Number, entered as text. Typing an apostrophe before typing the Social Security number will properly format the number as a text entry. The hyphen can be included (i.e. `123-45-6789) or excluded. Column B - Employee Salary Reduction Contribution, entered as numeric data. Type the numbers with no special preceding characters. Column C - Employer Contribution, numeric. Enter the appropriate dollar amount or a zero if this column does not apply. Column D - Employee Plan Loan Repayment, numeric. Enter the appropriate dollar amount or a zero if this column does not apply. 4) Please add the employee s name as an extra column on the right side of the spreadsheet to help resolve any contribution questions TRS may have. 8 Transamerica Signature Service

SAMPLE FORMAT CLIENT # PAY DATE SS# EMPLOYEE EMPLOYER LOAN EMPLOYEE NAMES CONTRIBUTION CONTRIBUTION SUB TOTALS - - - 9 Transamerica Signature Service

3.7 CONTRIBUTION REMITTANCE VIA ACH, WIRE, OR CHECK There are four methods to remit your plan s contributions: ACH (Automated Clearing House) Collection ACH Payment Wire Transfer Check You must indicate on the TransAccess File Upload or the hardcopy report if you are using a forfeiture credit to reduce employer contributions. See section 3.8 for more information on forfeitures. Remitting Via ACH Collection This is the optimal method of remitting contributions to your retirement plan. Forfeitures may be used to reduce Employer contributions only if your plan allows for this provision and the forfeiture account exceeds the amount by at least 10% to allow for market fluctuation. ACH Collection is the optimal method of remitting contributions. After TRS reconciles your contribution data, they will send a request for funds, via ACH, to your bank. The funds will be withdrawn from your account within 24 hours after the reconciliation of data is received in good order. (Please note, if a weekend or holiday falls within this time frame, the funds will be processed on the next business day.) Signing Up to Use ACH Collection A sample request form for ACH is located on page 14 of this chapter and must be completed by your organization to begin implementation of the convenient service. Remitting Via ACH Payment This option is available if you prefer to initiate the ACH payment as opposed to TRS debiting your account. However, in order to use this feature, you must contact your bank to set up a pre-note. You must give the bank the following information to ensure the ACH transaction is properly identified. Contract Number Plan ID ABA Number: 022000046 Account Number: 0970241155 10 Transamerica Signature Service

3.7 CONTRIBUTION REMITTANCE VIA ACH, WIRE OR CHECK CONT. Remitting Via Wire Transfer When remitting by wire follow these instructions: Bank Name: Manufacturers and Traders Trust Bank Buffalo, NY Account Name: Transamerica Financial ABA Number: 022000046 Account Number: 0970241155 Be sure to include the following information: Your Company Name Your Contract Number Attn: Retirement Services Accounting Carlos David, T-04-05 Tel. No: (213) 741-6486 Fax No: (213) 741-6788 When a check is received without allocation data, we will call you for follow-up instructions. Correct payments are credited to your plan according to the timing standards stated in your service agreement. Remitting Via Check When remitting by check follow these instructions: Make the check payable to Transamerica Life Insurance Company (only one check is required per remittance). Write your company s plan name and contract number on the stub portion of the check. In the case of a diskette, include a hard copy printout with a labeled check. Address on page 5 Important Notes: Reconciling Submissions and Remittances Additional Remittance Situations If we receive a check without allocation data, we will contact your office to obtain further instructions. Correct Payment If the total of the data equals the check submitted and we have investment elections on file for each employee, we will credit the contribution to your plan trust within one business day of receipt of data in good order. 11 Transamerica Signature Service

3.8 USE OF FORFEITURE Refer to your Plan Document to identify how forfeitures are to be handled. A forfeiture is the non-vested portion of a Participant s account that is given up (or forfeited ) when they terminate service and request a distribution of their vested funds. After the close of the plan year, these forfeiture funds can be used to: Pay Plan Expenses (If document allows) Reduce Employer Contributions Give the Employees an additional contribution (reallocation) How Do You Reduce Employer Contributions? If your Plan is set up to have forfeitures used to reduce Employer Contributions, you should contact TRS at (800) 742-9389 Ext. 6 to find out how much is in the forfeiture account at the time you are ready to make your Employer Contribution. You can then reduce the anticipated contribution amount by the forfeitures. Examples: The 2005 Employer Contribution is calculated to be $50,000. Contact TRS to find out if the Plan currently has forfeitures that may be used to reduce Employer Contributions. If there is $2,000 in forfeitures available for use, instead of sending in a check for $50,000, you would only need to send in $48,000 with a directive to use the $2,000 in forfeitures. -OR- The amount the company has set aside to contribute is $50,000. Contact TRS to find out what the Plan currently has in forfeitures. Using the value of the forfeiture account in the previous example, you can add the forfeiture amount to the $50,000 contribution, creating a $52,000 contribution which you would then reduce by the $2,000 in forfeitures. 12 Transamerica Signature Service

3.8 USE OF FORFEITURES CONT. What if you don t intend to make a contribution? If your company does not intend to make a contribution, but there are forfeitures available at year-end, you should direct TRS to allocate these funds according to the stated Employer Contribution formula. Example: For the 2005 Plan Year, the company is unable to make an Employer Contribution. The company contacts TRS to find out what the plan currently has in forfeitures available. The company can instruct TRS of their intent to make a contribution in the amount of the forfeitures and request to reduce their contribution by the forfeiture. This will bring the required company contribution to zero. You must use your forfeitures on an annual basis regardless of whether you intend to make an Employer Contribution. What if my document reallocates forfeitures? If your document provides for the reallocation of forfeitures, you should direct TRS to reallocate those amounts when you send in your Employer Contribution amount. 13 Transamerica Signature Service

Transamerica (ACH) Installation Request Form This form is used to establish automatic withdrawals from your banking account for your retirement plan contributions, as directed by your third party administrator Transamerica for deposit to the Transamerica Life Insurance and Annuity Company (Transamerica) contract indicated below. CLIENT DATA Name of Plan Name of Plan Sponsor Name of Technical Contact Address Contract Number Phone Number Phone Number AUTHORIZATION TO BANK Please accept this as formal notification that effective, Transamerica will be responsible for the record keeping of the retirement plan mentioned above. Transamerica is hereby authorized to access the account listed below on behalf of the plan, to withdraw or deposit monies in respect to contributions to Transamerica contract via the Automated Clearing House. Transamerica is authorized to withdraw the exact contribution amount remitted to Transamerica by the Plan Sponser as directed by Transamerica. The Plan Sponsor has full responsibility for this retirement plan. The undersigned, as an authorized signer on behalf of the Plan, hereby grants Transamerica authority to make withdrawals from the account noted below: BANK DATA TA# 0970241155 Bank Street Address Bank Account Type Savings Checking Bank Account Name Bank Account Number Routing Number Bank Representative Phone Number The Plan Sponsor agrees to provide Transamerica with a 30-day notice prior to closing or changing this account by contacting a Customer Service Representative at (800) 371-5086. Signed: Date: Title: NOTE: Please send this completed form and a blank, voided check to: Transamerica, 8488 Shepherd Farm Drive, West Chester, OH 45069 Important: Please send a copy of this completed document to your bank representative. 14 Transamerica Signature Service