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Recommended Resources

 
 

www.401k-laws.com for information about one-person 401k plans-Topics include: - One-person 401k Plans and Single-Employer 401k Plans, - Funding Standard Account,
- 401k-Type Plans for One-Person Businesses, - Current Law, - Summary Annual Report

www.targetagefunds401k.com for information about basic 401k facts and rules-Topics include: - Small 401(k), - Tax consequences, - Withdrawal of funds, - Required minimum
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www.401k-solution.com for information about insider's view of hidden 401k fees-Topics include: - An Insider's View of 401k Fees, - What Are Your Fiduciary Duties Regarding
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compliance, and other services related to the operation of a plan ("administrative expenses"), - Investment consulting, brokerage, or advisory services ("advisory
expenses"), - Concluding Thoughts, - Do you know if you are paying 401k fees?, - Contributing to a Roth 401k

www.no-load-mutual-funds.net for information about small 401k using no load funds-Topics include: - Best selection of small 401k no load mutual funds, - 401k for small
business using no-load mutual funds, - 401k no load mutual funds, - no-load funds information, - noload mutual funds on-line, - 11 Questions To Ask Yourself About Your
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www.profit-sharing-401k.com for information about 401k prototype plan documents for small businesses-Topics include: - Small business 401k profit sharing plans using
IRS-approved prototype plan documents, - 401k IRS-approved profit sharing 401k prototype plan and 401k adoption agreement, - IRS 401k determination letter and 401k
prototype plan documents

www.401k-for-one.com for information about 401k trustees and fiduciary responsibilities-Topics include: - What is a 401k Fiduciary, - 401k Plan Options for Trustees, - Various
DC Plan and Fiduciary Roles, - Advantages of in-house Administration

www.401kadministrator.com for information about 401k testing rules and adp and top-heavy testing-Topics include: - ADP compliance testing, - nondiscrimination 401k testing,
- 401k rules, - 401k testing procedures, - average deferral percentage, - 401k testing software for small business, - 401k Retirement Plan Service Providers, - 401k Plan Documents
And Cross-Tested 401k Plans

www.portfoliosetup.com for information about Portfolio Factory, where you can easily and affordable setup and brand custom 401k portfolios.

 

Commentary

What Information Is Your Plan Required to Disclose?

ERISA requires plan administrators -- the people who run plans -- to give you in writing the most important facts you need to know about your pension plan. Some of these facts must be provided to you regularly and automatically by the plan administrator. Others are available upon request, free-of-charge or for copying fees. Your request should be made in writing.

One of the most important documents you are entitled to receive automatically when you become a participant of an ERISA-covered pension plan or a beneficiary receiving benefits under such a plan, is a summary of the plan, called the summary plan description or SPD. Your plan administrator is legally obligated to provide to you, free of charge, the SPD. The summary plan description is an important document that tells you what the plan provides and how it operates. It tells you when you begin to participate in the plan, how your service and benefits are calculated, when your benefit becomes vested, when you will receive payment and in what form, and how to file a claim for benefits. You should read your summary plan description to learn about the particular provisions that apply to you. If a plan is changed, you must be informed, either through a revised summary plan description, or in a separate document, called a summary of material modifications, which also must be given to you free of charge.

In addition to the summary plan description, the plan administrator must automatically give you each year a copy of the plan s summary annual report. This is a summary of the annual financial report that most pension plans must file with the Department of Labor. These reports are filed on government forms called Form 5500 or 5500-C/R. The summary annual report is available to you at no cost. To learn more about your plan s assets, you may ask the plan administrator for a copy of the annual report in its entirety.

If you are unable to get the summary plan description, the summary annual report or the annual report from the plan administrator, you may be able to obtain a copy by writing to the Department of Labor, PWBA, Public Disclosure Room, Room N-5638, 200 Constitution Avenue, N.W., Washington, D.C. 20210, for a nominal copying charge. If possible, provide the name of the plan, employer identification number (a 9-digit number assigned by the IRS) and the plan number (a 3-digit number, such as 002). If you do not have this information, give the name of the plan and the city and state.

If you have information that plan assets are being mismanaged or misused, sent details to the nearest regional or district office of the Department of Labor, see paragraphs 46 thru 48 for a list of PWBA office.

401k Tip---
According to Southern California-based (401k) Enginuity (www.401kenginuity.com), twenty-year veteran in developing and running 401(k) administration and 401(k) software and recordkeeping systems, the Internet will be the primary delivery system for 401(k)s by 2007. Many web-based 401(k) plans will run on administration and recordkeeping platforms that plan providers will outsource to 401k specialists and 401k Application Service Providers (ASP).

The advantages of web-based online 401(k) plans are obvious to today's workers, and include use conveniences, real-time monitoring and reporting, and instant re-allocation of their retirement assets. The internet has also dramatically reduce the cost of 401(k) plan administration, saving plan sponsor 50% or more in ongoing fees and costs when compared to the older traditional labor-intensive plans. Outsourcing of 401(k) functions by plan providers will extend the trend towards lower cost, high-quality 401(k) products.

401(k) plan providers of all types, financial institutions including banks, insurance companies, brokerages, mutual fund companies, credit unions, and third-party administrators, are now actively outsourcing 401(k) administration and recordkeeping tasks to 401(k) ASPs --- vendors such as 401k Enginuity, whose sole function is to maintain, updated and supervise software-based 401(k) administration and recordkeeping systems on behalf of plan providers. 401(k) ASP vendors are responsible for all routine day-to-day 401(k) recordkeeping and administration functions, thus allowing the plan providers to reduce internal staff, eliminate the expense and complications of licensing, housing and running hardware and 401(k) administration software in-house. Plan providers can refocus and concentrate their efforts on to the needs of their plan sponsors and plan participants, and rely upon the outsourced ASP 401(k) vendor for the recordkeeping and technical "backbone" supporting providers' Internet-based plans. It is inevitable that some of this 401(k) outsourcing to ASPs will include secondary outsourcing of certain non-critical low-level routine day-to-day tasks to non-US locations, where labor costs are less yet the expertise is abundant.

Following is a list and description of the documents that must be made available to you. If a plan administrator refuses to comply with your request for documents, and the reasons are within his or her control, a court may impose a penalty of up to $100 per day. The Department of Labor does not have the authority to impose this penalty. See Chapter 6 on your right to sue under ERISA to enforce your rights.

Sources of Plan Information


Type of Document Who you can get it from When you can get it Your cost
Summary Plan Description (SPD): This summary of your pension plan tells you what the plan provides and how it operates. Plan
Administrator
Upon Written Request Reasonable
Charge
Automatically within 90 days of your becoming covered under the plan Free
Automatically every 5 years if your plan is amended Free
Automatically every 10 years if your plan has not been amended Free
Department
of Labor
Upon request Copying
Charge
Summary of Material Modifications (SMM): This summarizes material changes to your plan. Plan
Administrator
Automatically within 210 days after the end of the plan year for which the plan has been amended or modified (distribution of a revised SPD satsifies this requirement) Free
Department
of Labor
Upon request Copying
Charge
Summary Annual Report: This summarizes the annual financial reports that most pension plans file with the Department of Labor. Plan
Administrator
Automatically within 9 months after the end of the plan year, or 2 months after the due date for filing the annual report. Free
Annual Report (Form 5500 Series): Annual financial reports that most pension plans file with the Department of Labor. Plan
Administrator
Latest annual report upon written request Reasonable
Charge
Department
of Labor
Upon request Copying
Charge
Individual Benefit Statement: A statement describing your total accrued and vested benefits is required to be provided by most pension plans. Plan
Administrator
Upon written request once every 12 months Free
Documents and instruments under which the plan is established or operated: This includes, for example, the plan document, collective bargaining agreement, trust agreement, SPD, SMM, and latest annual report. Plan
Administrator
Upon written request Reasonable
Charge
Available for inspection upon request Free
Disclosure Notice: Plan administrators with plans less than 90% funded must inform you about the plan funding level and limits on PBGC's guarantees. Plan
Administrator
Within 2 months after the due date for filing the annual report Free

*Documents filed with the Labor Department can be obtained by contacting the U. S. Department of Labor, PWBA, Public Disclosure Facility, Room N5638, 200 Constitution Avenue, NW, Washington, D.C. 20210, (202) 219-8771.

What Documents Are Available At Other Federal Agencies?

Documents for some plans are available for public inspection at the Internal Revenue Service. These documents include the applications filed by pension plans to determine if they meet federal tax-qualification requirements, applications filed by certain organizations to determine if they qualify as tax-exempt, and the Internal Revenue Service responses to these applications. Get in touch with the Internal Revenue Service Freedom of Information Reading Room, P.O. Box 795, Washington, D.C. 20044, tel. (202) 622-5164, for information on available documents.

If you terminate employment and you have a vested pension benefit (see Chapter 3 for an explanation of vested benefits) that you are not eligible to receive until later, that information will be reported by your plan to the Internal Revenue Service, which, in turn, will inform the Social Security Administration. This information must also be provided to you by the plan. The Social Security Administration will tell you, upon request, whether you were reported as having a deferred vested benefit under any plan; for information about making these requests, call 1-800-772-1213 (toll-free). The Administration will automatically give you this information when you apply for social security benefits. Nevertheless, it is in your interest to keep the plan administrator informed about any change of address or name change after you leave employment to assure that you will receive the pension benefit due to you.


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