1.
Did You Notice: DC Plan Communications
ASPPA Annual Conference – Workshop #2 – November 1, 2009
Presented by Robert Kaplan, ING Retirement Services
Adam C. Pozek, DWC ERISA Consultants, LLC

2.
Overview

3.
Why All These Notices?
 Importance of Defined Contribution plans to
retirement
 Effective availability of benefits
 Complexity of participant decisions
 Timeliness of information
Written in a manner calculated to be understood by the
average participant.

4.
Common Notifications
 Summary Plan Description (SPD)
 Summary of Material Modification (SMM)
 Summary Annual Report (SAR)
 Participant Benefit Statement

5.
New Notices
 Auto enrollment notice (QACA/EACA)
 QDIA notice
 Stock diversification notice
 Auto rollover notice

6.
Forms
 Enrollment/deferral election
 Investment election
 Beneficiary designation

7.
General
Disclosures

8.
Summary Plan Description
 A “Plain English” description of plan
provisions
 Must include information on:
 Eligibility
 Vesting
 Contributions
 Distributions
 Plan contact information

9.
Summary Plan Description
 Must be provided:
 Within 90 days of initial eligibility
 Within 120 days of plan becoming subject to
ERISA
 Must be updated:
 Every 5 years if plan is amended
 Every 10 years if plan is not amended
 EGTRRA Restatements – budget time for SPD
Updates

10.
Summary Plan Description
 Penalties
 Up to $1,100 per day to DOL
 Up to $110 per day to participants

11.
Summary of Material Modification
 Any time an amendment changes information
from SPD
 Due by 210th day of the year following the
effective date of amendment
 Advance notice
 Same penalties as SPD

12.
Claims Procedure
 Usually included in SPD
 Appeals process and timeframes
 Same due date as SPD
 Same penalties as SPD

13.
QDRO Procedure
 Usually included in SPD
 Procedure for review and qualification of
Domestic Relations Orders

14.
Summary Annual Report
 Financial information from Schedule I/H to
Form 5500
 Notification of right to additional information
 Contact information for DOL
 Due 2 months after Form 5500 filing deadline

15.
Participant Benefit Statements
 Current Requirements
 Quarterly for participant-directed plans (45 days
after
 Annually for trustee-directed plans (5500 filing)
 Based on most recently available information
 Penalty of up to $100 per day to participant

16.
Participant Benefit Statements
 Account information
 Vesting information
 Statement regarding importance of
diversification
 DOL website for more information on proper
investing
 Statement regarding integration with SS
 Note: Still waiting for DoL sample statement
which as due to us by August 17, 2007

17.
Participant Benefit Statements
 Brokerage accounts
 Employer securities
 On-demand statements
 Hard-to-value assets
 Fiscal year plans

18.
Investment
Disclosures

19.
Participant Education
 Educational materials
 Risk tolerance survey
 404(c) disclosures

20.
Qualified Default Investment Alternative
 Describes default action if no investment
election is on file
 Due 30 days before default action is taken
(exemption for immediate eligibility plans) and
prior to each plan year
 Provides relief from liability for plan fiduciaries

21.
Qualified Default Investment Alternative
 Right to move money without financial penalty
 Balanced fund
 Lifestyle/target maturity date fund
 Professionally managed account
 No current provision for money market or stable
value fund

22.
Participant Investment Advice
 Delayed until 11/18; proposed legislation in the
House
 Acknowledgement of fiduciary status
 All fees and compensation
 Historical performance of all options
 Material relationships between advisor and
investments options
 Manner in which participant info will be used
 Participant’s right to seek other advice

23.
Fund Mapping
 Notice 30 – 60 days in advance
 Comparison of old and new options
 Explanation of default action to be taken
 No affirmative instruction from participant
 Investment prior to mapping resulted from
participant direction

24.
Diversification of Employer Securities
 Employee contributions
 Immediate
 Employer contributions
 Completion of 3 years of service
 Frequency
 Same as other investment transfers
 At least quarterly

25.
Diversification of Employer Securities
 30 days prior to date of eligibility to diversify
 Importance of diversification
 Penalty of $100/day/participant for failure to
provide

26.
Joining
The Plan

27.
Enrollment
 Deferral election
 Catch-up election
 Bonus election
 Investment election/QDIA
 Automatic enrollment

28.
Beneficiary Designations
 Considered to be plan documents
 Override state domestic relations laws and wills

29.
Distribution
Notices

30.
Distribution Notices
 Application for payment (30 to 180 days prior)
 Special Tax Notice
 Election to defer RMD
 Form 1099-R

31.
Mandatory Distribution/Auto Rollover
 Notification of rollover in lieu of election
 Financial institution
 Investment product to be used
 Expenses

32.
Participant Loans
 Participant loan program
 Loan application
 Promissory note
 Amortization schedule
 Truth-in-lending disclosure
 Eliminated as of July 1, 2010

33.
Miscellaneous
Disclosures

34.
Blackout Period
 Participant notice 30 days prior to blackout
 Identify beginning and ending week
 Explain rights and investments affected
 Advise as to the prudence of a diversified
portfolio
 Penalties of $100 per day per participant for
failure to give notice
 Question on 2009 Form 5500

35.
Safe Harbor Notice
 30 - 90 days prior to start of the plan year
 Contribution, distribution and vesting
information
 Supplemental notice for “Flexible” QNEC
 Disqualification for failure to provide

36.
Robert Kaplan
ING Retirement Services
914.629-8882
Robert.Kaplan@us.ing.com
Adam C. Pozek
DWC ERISA Consultants, LLC
651.204.2600, ext. 107
Adam.Pozek@dwcconsultants.com