**Please review the assignment of responsibility for the administration of the plan and indicate any changes. 1. IDENTITY OF RESPONSIBLE PARTIES 1. Identity of People in Each Header Category 2. Point person for participant questions regarding plan operations 3. Point person for participant questions regarding plan investments 4. Point person for Fund Holder questions regarding plan operations 5. Point person for identifying changes in the law that impact the plan 6. Authorized to adopt all plan amendments 7. Authorized to adopt limited plan amendments II. REPORTING 8. Maintain financial accounting for the Plan during the year 9. Determine/provide fair market value of assets that do not require independent valuation or appraisal Ferenczy Benefits Law Center LLP, 2016
10. Provide independent valuation or appraisal, if needed 11. Provide preliminary accounting to and plan auditor 12. Prepare Plan year financials (i.e., balance sheet and income statement) 13. Evaluate whether audit is required due to existence of 100+ participants (and effect of 80-120 rule) 14. Evaluate whether audit is required due to existence of nonqualifying assets 15. Retain CPA to perform audit 16. Perform audit and provide audited financial statements 17. Evaluate whether a given transaction is prohibited 18. Determine appropriate correction for prohibited transaction 19. Determine any excise tax payable in relation to prohibited transaction 20. Prepare Forms 5330 in relation to any prohibited transactions 21. Determine existence and amount of any unrelated business taxable income (UBTI) PAGE 2 Ferenczy Benefits Law Center LLP, 2016
22. Determine tax payable on UBTI 23. Prepare Form 990T in relation to UBTI 24. Review and verify accuracy or acceptability of trust statement, financial statements, Form 5500, audited financials III. ENROLLMENT OF PARTICIPANTS 25. Provide census information prior to each entry date to the person responsible for determining eligibility 26. Evaluate eligibility and census information to determine who is eligible to enter the Plan on each entry date 27. Provide enrollment forms to eligible employee (for deferral elections, investment elections, and beneficiary designations) 28. Provide mandatory notices at enrollment (Automatic Enrollment/ QDIA/ Fees/ Diversification/ 404(c) / Other) 29. Provide SPD to new participants 30. If not part of SPD, provide loan procedure to new participant PAGE 3 Ferenczy Benefits Law Center LLP, 2016
31. Receive and keep enrollment forms from participants; evaluate forms for completeness 32. Provide copies of completed enrollment forms to payroll department,, recordkeeper, financial advisor or manager, as needed 33. Ensure that elected deferral percentage for each new participant is properly entered into payroll system 34. If applicable, determine portion of deferral that is pretax vs. Roth 35. If applicable, establish separate Roth account for participant 36. If applicable, keep record of beginning of 5-year qualifying period for Roth contributions 37. Evaluate compensation types for participant and ensure that deferrals are being removed from all planincluded compensation types 38. Confirm that proposed deferrals do not exceed plan defined limits or legal maximums 39. Verify entry and commencement of deferrals for new participants PAGE 4 Ferenczy Benefits Law Center LLP, 2016
40. 41. 42. 43. If automatic enrollment, initiate automatic deferrals for participants who did not make alternate election If automatic increase, identify and calendar due dates for the increase If automatic increase, initiate increase for affected participants Retain copies of deferral and investment elections (including affirmative elections not to defer and elections to automatically increase deferrals each year) 44. Maintain copies of beneficiary designations 45. Determine initial vesting computation period 46. Analyze eligibility service and vesting service to be credited to rehired employees 47. Determine appropriate entry/re-entry date for rehired employees 48. Determine forfeitures that must be restored for rehired participants who terminated without a vested interest or who repay their distributions PAGE 5 Ferenczy Benefits Law Center LLP, 2016
IV. CONTRIBUTION DETERMINATION 49. Collect census information to determine contribution eligibility and proper vesting 50. Determine employees eligible to participate in contribution allocation 51. Determine includible compensation for participant for each type of contribution 52. Determine portion of salary deferral that is eligible for matching contribution (i.e., limit to maximum percentage of compensation) 53. Determine amount of matching contribution for each participant 54. Determine amount of true-up matching contribution at year end (if any) 55. Determine maximum deductible profit sharing/matching contributions 56. Determine amount of profit sharing contribution for the plan/each tier for tiered allocations 57. Verify contributions are not based upon compensation in excess of 401(a)(17) compensation limit PAGE 6 Ferenczy Benefits Law Center LLP, 2016
58. Determine if plan is top-heavy 59. Identify key and former key employees for top heavy purposes 60. Calculate top heavy minimum (if applicable) 61. Determine maximum contribution under IRC 415 and verify that contributions do not exceed that limit 62. perform final allocation of contributions to participant accounts 63. Determine premiums to be paid for life insurance in the plan 64. Confirm that insurance premiums do not exceed incidental limit 65. Pay life insurance premiums for life insurance held in the plan 66. Upon participant s request to make a rollover contribution, determine and maintain records of eligibility for rollover contributions 67. Confirm that rollover is acceptable 68. If rollover includes Roth, identify beginning of 5-year qualifying period PAGE 7 Ferenczy Benefits Law Center LLP, 2016
V. OTHER ANNUAL ALLOCATIONS, FORFEITURES 69. Determine and maintain records of vested service 70. Determine participant s vested interest 71. Allocate investment gains/losses 72. Determine timing of forfeiture from a participant s account 73. Determine timing of use of forfeiture 74. Authorize forfeiture from participant s account 75. Select and authorize use of forfeiture 76. Reallocate forfeiture (if applicable) 77. Determine amount to be contributed by the employer based on use of forfeitures to reduce employer contribution (if applicable) VI. TESTING (OTHER THAN ADP/ACP) 78. Verify Controlled Group Members / Affiliated Service Group Members for inclusion in testing PAGE 8 Ferenczy Benefits Law Center LLP, 2016
79. Identify whether there are any leased employees 80. Perform IRC 401(a)(4) nondiscrimination testing (other than ADP/ACP tests): contributions (including cross-testing); benefits, rights, features; amendments 81. Determine whether gateway benefits have been provided for cross-tested plans 82. IRC 414(s): Ensure that compensation definition is nondiscriminatory 83. IRC 410(b): If there have been any acquisitions or dispositions of companies or divisions, determine if any transition period applies 84. IRC 410(b): Ensure that sufficient employees are being covered in the Plan 85. If necessary, determine if the QSLOB rules can apply to this plan 86. If QSLOB rules to be used, prepare Form 5310A filing to IRS 87. If QSLOB rules are to be used, file Form 5310A with the IRS 88. If necessary, update QSLOB filing with IRS PAGE 9 Ferenczy Benefits Law Center LLP, 2016
89. Determine if additional plans must be aggregated with this Plan for testing and compliance purposes and instruct service providers accordingly 90. If aggregation is required, provide information about all plans to the entity doing the aggregated testing 91. 92. If any testing is failed, identify possible correction methods If any testing is failed, make correction VII. 401(k) AND MATCHING ISSUES 93. Provide annual mandatory notices (Automatic Enrollment / QDIA / Fees / Diversification / 404(c) / Other) (if applicable) 94. Determine if plan is a safe harbor 401(k) plan 95. If safe harbor plan, confirm that annual notice was provided 96. If maybe notice is provided, and safe harbor plan desired, provide participants with follow-up notice at least 30 days before plan year end 97. If maybe notice is provided and safe harbor plan desired, prepare necessary amendment before year end PAGE 10 Ferenczy Benefits Law Center LLP, 2016
98. If maybe notice is provided and amendment needed, adopt amendment 99. Determine compensation to use for deferrals 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. Determine compensation to use for matching contributions Determine compensation to use for testing Verify that deferrals do not exceed limits of 402(g) Verify that deferrals do not exceed plan-defined limits on deferrals Verify that catch-up contributions do not exceed limits of 414(v) Determine whether catch-up contributions are eligible for matching contributions Verify that automatic deferrals and increases (if any) have been properly performed Determine eligibility of participant to receive safe harbor contribution Calculate safe harbor contributions for each participant Perform ADP Test, if not safe harbor PAGE 11 Ferenczy Benefits Law Center LLP, 2016
110. 111. 112. 113. Determine if any or all matching contributions are subject to safe harbor rules Perform ACP Test (if applicable), if not safe harbor If ADP/ACP test(s) failed, determine possible correction Decide appropriate correction for failed test (i.e., refunds/ distributions/ forfeitures to HCEs, QNECs or QMACs to NHCEs) 114. Effect elected correction 115. 116. 117. 118. Prepare Forms 1099R for participants to report refunds or distributions Determine applicable excise tax if correction is made after preliminary deadline (i.e., 2½ months after year end if no EACA; 6 months after year end if EACA) Prepare Form 5330 for excise tax on excess deferrals or matching contributions (if necessary) Ensure deposits of salary deferrals are made to Fund Holder within time permitted by Department of Labor for each payroll period PAGE 12 Ferenczy Benefits Law Center LLP, 2016
119. 120. 121. If maybe not notice provided and cessation of safe harbor desired, provide secondary notice If maybe not notice provided and cessation of safe harbor desired, prepare necessary amendment If maybe not notice provided and amendment needed, adopt amendment VIII. DISTRIBUTIONS OF BENEFITS 122. 123. 124. 125. 126. Upon request of participant for a distribution, provide election forms Receive claims for benefits (i.e., completed election form) from participant Review of election forms to see if fully completed, signed by appropriate parties, and returned within 180-day period Evaluate participant s eligibility to receive a distribution Issue claims denial if not eligible to receive a distribution 127. Receive appeal of claim denial 128. Adjudicate claims appeals and communicate appeals decision to participants PAGE 13 Ferenczy Benefits Law Center LLP, 2016
129. Confirm vested interest on termination of employment 130. Determine amount to be distributed 131. 132. 133. Determine basis in Roth distributions Determine whether 5-year qualification period is completed for qualified Roth distribution Determine whether Roth distribution is qualified 134. Determine taxation of distribution 135. Determine any required or elected withholding 136. Authorize/make distribution 137. Prepare withholding deposit forms 138. Provide withholding and forms to IRS 139. Prepare Form 1099R for distribution 140. Provide Form 1099R to participant and IRS PAGE 14 Ferenczy Benefits Law Center LLP, 2016
141. 142. 143. 144. Determine required cash-out amounts for the year (i.e., accounts for terminated participants with less than $1,000 value) Determine amounts to be moved to an automatic IRA rollover (i.e., amounts for terminated participants with $1,000 to $5,000 in value) Prepare distribution election forms for potential cash-out participants as required Send distribution election forms to potential cash-out participants 145. Receive cash-out elections, if any 146. 147. Authorize/ make cash-out distributions Acquire automatic IRA rollover accounts when needed. 148. Identify missing participants 149. 150. 151. Take necessary steps to locate missing participants If appropriate, forfeit accounts of missing participants (subject to restoration when found) Evaluate claim by found participant PAGE 15 Ferenczy Benefits Law Center LLP, 2016
152. 153. 154. 155. 156. Authorize restoration of account for found participant If hardship distribution requested, evaluate participant s eligibility for hardship Obtain and retain proof of hardship event from participant Determine permissible hardship distribution If hardship distribution, confirm that deferrals have ceased for 6 months 157. If hardship distribution, solicit new deferral election after end of 6 months 158. Receive proposed QDROs 159. 160. 161. 162. Advise participant/former spouse regarding QDRO receipt (and provide copy of QDRO Policy) and, if applicable, Form QDRO Evaluate proposed QDRO to determine if it qualifies as such Communicate with participant and alternate payee regarding determination of QDRO qualification Segregate account/initiate distribution to alternate payee PAGE 16 Ferenczy Benefits Law Center LLP, 2016
163. 164. 165. 166. Determine that a 5% shareholder or a terminated employee is required to begin taking minimum distributions (at age 70 ½) Provide employee with information regarding minimum required distribution options Determine amount of minimum required distribution Authorize/make minimum required distribution IX. PARTICIPANT LOANS 167. 168. 169. 170. 171. 172. Receive loan request from participant Provide loan application to participant Determine eligibility of participant for a loan Determine maximum amount that may be borrowed Determine applicable interest rate on loan Confirm proper completion of loan application 173. Approve/deny loan request PAGE 17 Ferenczy Benefits Law Center LLP, 2016
174. 175. 176. 177. 178. 179. 180. 181. 182. 183. Communicate approval/denial to participant Prepare loan documents and amortization schedule Provide loan documents to participant for signature Receive and retain signed loan documentation Initiate payroll deduction for loan payment Verify that proper payroll deduction for loan payments are being removed from payroll Confirm timely transmittal of loan payment to Fund Holder Identify that loan has been fully repaid Terminate payroll deduction for payments in relation to fully repaid loan Provide terminated participant with information on repayment of loan 184. Determine that loan is in default 185. Provide notice of delinquency to participant, plan sponsor PAGE 18 Ferenczy Benefits Law Center LLP, 2016
186. 187. 188. Determine timing of default and offset of loan and applicability of cure period Prepare Form 1099R for defaulted loan Provide Form 1099R to participant and IRS X. PARTICIPANT COMMUNICATIONS 189. 190. 191. 192. Prepare annual 404a-5 notice for participants regarding plan investments and fees Prepare quarterly 404a-5 notice for participants regarding actual fees charged to participant accounts Provide annual and quarterly 404a-5 notices to participants Prepare Summary Annual Report (SAR) 193. Provide SAR to participants 194. 195. 196. Provide annual funding notice to Participants Prepare benefit statements meeting requirements of Provide benefit statements to participants PAGE 19 Ferenczy Benefits Law Center LLP, 2016
197. 198. 199. Provide Summaries of Material Modifications (SMMs) or new SPDs to participants Prepare transaction-based communications (acquisitions/ mergers/ conversions) Provide transaction-based communications to participants XI. GOVERNMENT REPORTING 200. Prepare Form 5500 201. Prepare Schedule A 202. Prepare Schedule C 203. Prepare Schedule D 204. Prepare Schedule G 205. Prepare Schedule H 206. Prepare Schedule I 207. Prepare Schedule R 208. Prepare Form 8955-SSA PAGE 20 Ferenczy Benefits Law Center LLP, 2016
209. Receive CPA audit report 210. 211. Prepare Form 5558 Extension for filing Form 5500 (if needed) Put together all necessary forms and schedules for electronic filing with DOL (if not Form 5500-EZ) 212. Sign Form 5500/5500-EZ 213. File Form 5500 electronically with the DOL 214. File Form 5500-EZ with IRS XII. DEFINED BENEFIT ACTIVITIES 215. Calculate benefits for all participants 216. 217. 218. 219. Ensure that benefits do not exceed 415(b) limits Determine minimum required contribution and maximum deductible contribution Prepare and sign Schedule SB or MB and actuarial report Assist employer with electronic filing and payment of PBGC premiums PAGE 21 Ferenczy Benefits Law Center LLP, 2016
220. 221. If minimum funding not met, determine excise tax If minimum funding not met, prepare Form 5330 222. If necessary, file Form 5330 223. Prepare AFTAP Certification 224. 225. 226. Provide AFTAP Certification to employer Ensure before any distributions that there are no limitations under IRC 436 If any plan amendments being prepared, ensure that they do not violate 436 227. Prepare annual funding notice 228. 229. Provide annual funding notice to participants If necessary, obtain information regarding annuity for distribution to participant XIII. QUALIFICATION AND DOCUMENTATION 230. Prepare plan documents PAGE 22 Ferenczy Benefits Law Center LLP, 2016
231. Prepare trust document 232. Prepare amendments upon request 233. Prepare minutes of appropriate entity to authorize adoption of documents 234. Prepare SPD 235. Prepare SMM 236. Evaluate any 411(d)(6) anti-cutback issues in relation to proposed plan amendments 237. Prepare written loan procedures 238. Prepare written QDRO procedures 239. Provide procedures to participants 240. 241. 242. 243. Provide SPD/SMM to participants upon request Provide plan documents to participants upon request Prepare IRS favorable determination letter submissions (if appropriate) File IRS favorable determination letter submissions (if appropriate) PAGE 23 Ferenczy Benefits Law Center LLP, 2016
244. 245. 246. 247. 248. Prepare and maintain investment elections Prepare and maintain loan documentation Prepare and maintain loan documentation Prepare and maintain investment policy Prepare and maintain 404(c) compliance XIV. ASSETS 249. 250. 251. 252. Act as Investment Fiduciary/ Investment Manager Provide investment advice to Investment Fiduciary Provide investment advice to participants Provide information to employer regarding funds offered to participant for investment-direction and related fees and benchmarks to comply with 404a-5 obligations 253. Maintain prospectuses on file 254. Responsible for maintaining compliance with Section 404(c) PAGE 24 Ferenczy Benefits Law Center LLP, 2016
255. 256. 257. 258. 259. Prepare and maintain initial evaluation of investment options Prepare and maintain employee education materials on investments Prepare and maintain periodic (not less than annual) review of investment option performance Prepare and maintain analysis of reasonableness of fund fees Determine whether fund options should be maintained or replaced or placed on watch list XV. MISCELLANEOUS ANNUAL DUTIES 260. 261. Determine whether a given employee is participating in a qualified plan for purposes of Form W-2 Determine whether any plan amendments are needed or desired 262. Prepare any required amendments 263. 264. 265. Retain/dismiss plan service providers Evaluate whether service provider fees are reasonable If appropriate, seek new service provider(s) PAGE 25 Ferenczy Benefits Law Center LLP, 2016
266. Discuss effectiveness, desired plan changes with appropriate service provider(s) PAGE 26 Ferenczy Benefits Law Center LLP, 2016