2009 tasks

RMD decision for DC plans

Decide whether to make 2009 RMDs, skip them or allow participant to make the decision. Notice 2009-82

Note: plan must be amended to reflect decision by the end of 2011

11/30/2009

Rollover notice

Update existing rollover notice to reflect recent changes Notice 2009-68

12/31/2009

Sample amendment to add Automatic Enrollment

Must be adopted by 12/31/2009 if your plan already has the feature or before the beginning of the plan year in which the provision is effective if later Notice 2009-65

12/31/2009

Defined Benefit plans only

PPA added a provision requiring the electronic display of 5500 information on any intranet website maintained by the plan sponsor/plan administrator for the purposes of communicating with plan participants.

The requirement applies for the 2008 plan year; no regulations have been issued.  In addition, the provision requires identification and basic plan information and actuarial information included in the annually report to be filed electronically with the DOL

This is a requirement which may have “slipped through the cracks”; if you have a DB plan, check with your actuary

Plan Document Requirements

PPA provisions

Generally, amendments reflecting PPA must be adopted on or before the last day of the plan year beginning on or after January 1, 2009

12/31/2009 (calendar year plans)

Restatements

Cycle D – EIN’s ending in 4 or 9

2/1/2009-1/31/2010

(use Cumulative list D)

Pre-approved DC plans

Employers using pre-approved (master & prototype, volume submitter) defined contributions plans must adopt EGTRRA approved plan documents.  (IRS Announcement 2008-23)

April 30, 2010

HEART

Plans submitted in Cycle D can include HEART provisions; however, the Service won’t consider them in issuing the DL for Cycle D plans

12/31/2010(calendar year plans)

Annual Notices

401(k) Safe Harbor Notice

A written explanation of the safe harbor matching or nonelective contribution formula used under a plan designed to satisfy the 401(k) safe harbor.  The notice must be distributed between 30 – 90 days before the beginning of the plan year.

Before 12/2

participants

Automatic enrollment notice

PPA provides that ERISA preempts anti-garnishment state law with respect to automatic elective deferral deductions from a participant’s salary.  However, an annual notice informing the participant of his/her right to elect out of the automatic deferral as well as satisfying the qualified default investment rules is required.  This notice can be combined with the 401(k) default investment notice.

Note: many practitioners believe that the DOL has eliminated the requirement for an ACA notice unless the plan has a QDIA.  ERISA 514(e) requires the notice and the IRS requires a notice for plans with automatic enrollment. Proceed with caution.

the notice must be distributed annually

participants

QDIA notice

This is required by the Pension Protection Act if your plan provides a default investment for participants who do not make an investment election and you intend to treat the default election as a Qualified Default Investment Alterative (QDIA). The QDIA regulations were issued 10/24/2007 (see ErisaALERT 2007-4).

12/2

participants

EACA  and QACA notice

If you choose to offer either an eligible automatic contribution arrangement or a qualified automatic contribution arrangement, you must provide an annual notice to participants. A sample notice was issued by the government on 11/7/2007.

12/2

participants

Pension Benefit Statement notice

The annual benefit statement requirement will be considered met if at least once a year the plan administrator provides a notice to participants regarding the availability of the benefit statement and how to obtain it. See Periodic Benefit Statements for more details.

Before year end

participants

Periodic Notices as Required

Diversification notice for some defined contribution plans with investments in employer securities

Participants with contributions invested in employer securities must be given a notice explaining their rights to diversify out of employer securities.  The notice must be given not later than 30 days before the first date on which the participant is first eligible to divest employer securities..

As required

affected participants

Joint & Survivor Notices

A plan must provide a participant with a notice regarding his/her rights with respect to cash-outs, survivor annuities and eligible rollover distributions at least 30 days but not more than 180 days before the distribution date.

The notice regarding cash outs must explain the consequences of failing to defer the distribution.

as required

affected participants

Notice to terminated vested participants

Notice must be sent to participants who terminated with a vested benefit. 

no later than the former due date for filing SSA

participant

Investment advice

The Pension Protection Act permits plan sponsors to offer investment advice to participants in defined contribution plans. Specific information must be provided to plan participants before advice is given.

effective with respect to investment advice given after12/31/2006

affected participants

Black out notice

Notice of a period of more than 3 consecutive business days when there is a temporary suspension, limitation or restriction on directing or diversifying plan assets, obtaining loans, or obtaining distributions.

30-60 days before last available date to make a change

Participants with account balances; don’t forget beneficiaries and term vesteds

Mapping notice

For employers who change their investment lineup and utilize mapping (rather than solicit new investment direction elections) where participant investments are mapped into the new investments having similar risk and return characteristics as current investments. A notice must be provided describing the changes and comparing the new and current investment options as well as an explanation that the investments will be mapped to similar funds unless the participant makes a contrary election prior to the effective date of the change.

30-60 days before last available date to make a change

Participants with account balances; don’t forget beneficiaries and term vesteds

Defined Benefit Plan Benefit Statement

The annual benefit statement requirement will be considered met if at least once a year the plan administrator provides a notice to participants regarding the availability of the benefit statement and how to obtain it. See Periodic Benefit Statements for more details.

By 12/31/2007 if you are electing to provide the annual notice instead of the benefit statement

Affected participants

Defined Contribution Plan Statements

Provided at least once per calendar year to participants who have their own accounts but do not have the right to direct investments.

See FAB 2007-3. 

In addition, statements must be provided quarterly to participants or beneficiaries who have the right to direct investments.

The earlier of the date on which the Form 5500 is filed or the date, including extensions for the Form 5500 filing.

45 days following the end of the plan quarter

Affected participants

Annual Housekeeping

Set up all internal systems to reflect 2010 Benefit limits

operate plan in accordance with regulations

before 2009 year end

N/A

Verify internal processes and transmits employee contributions in a timely manner

Operate plan in accordance with regulations

ongoing

N/A

Verify compliance with 404(c) if applicable

401(k) plans electing 404(c) protection must satisfy applicable rules.  Intent to comply with 404(c) must be communicated to participants.

ongoing

N/A

Record retention

Documentation should be maintained for compliance related aspects of plan e.g., coverage test results, ADP/ACP test results, Form 5500 back up, disclosures to participants.  In addition, DOL proposed regulation 2530.209-2 provides that pension plan records must be maintained for each plan participant covered under the plan.  The records must be sufficient to determine benefits which are or may become due to the employee.  See also DOL 2530.107-1.

ongoing

upon IRS/DOL request

Compliance Reviews

Q-FR-17 of DOL regulation 2509.75-8 provides that the performance of trustees and other fiduciaries should be reviewed by the appointing fiduciary in such a manner as may be reasonably expected to ensure that their performance has been in compliance with the terms of the plan and statutory standards and satisfies the needs of the plan.

periodically

Fidelity Bond

Annually review existing fidelity bond to ensure that bonding requirements are met.  ERISA section 412(a) requires every fiduciary of an employee benefit plan and every person who handles funds or other plan property to be bonded.

See DOL Field Assistance Bulletin 2008 -04 for more information regarding bonding.

review at least annually

provide upon IRS/DOL request

Testing

Qualified Plans have various testing requirements including:

·         Coverage (IRC 410(b))

·         Actual deferral percentage test (ADP)(Reg. 1.401(k)-1(b)

·         Actual contribution test(ACP)(Reg. 1.401(m)-1(b)

·         Annual Addition testing (IRC Section 415(c))

·         Maximum Benefit testing (IRC Section 415(b))

·         Top Heavy testing (IRC 416 )

annually

upon IRS request

Annual Compliance Calendar

Distribute 1099-R’s

participants and beneficiaries who received retirement plan benefit payments during the preceding plan year must receive appropriate tax form

1/31

participant
beneficiary

File 1099- R with government

1099-R’s distributed to participants/beneficiaries must be filed with the government with Form 1096

2/28

IRS

File PBGC Form 1-ES (large plans)

Used by large defined benefit plans to pay flat rate premiums for single employer plans and estimated premiums for multiemployer plans that reported 500 or more participants on the prior year Form 1.

2/28

PBGC

Distribute excess contributions and
excess aggregate contributions

Excesses must be distributed within 2 ½ months after the end of the plan year to avoid the employer 10% excise tax.

Note: Plans which contain an EACA have 6 months after the end of the plan year to distribute these excesses.

3/15

participant

Initial Minimum distribution

Minimum distributions must begin by the 4/1 following the year the participant attains age 701/2

4/1

participant

File Form 5558 if needed

This form must be filed if the plan year and the corporate tax year do not coincide and additional time is needed beyond the Form 5500 due date.

Note: where the plan year and the corporate tax year is the same and a corporate tax extension has been filed, the corporate tax extension will apply to the Form 5500.

before Form 5500 due date

IRS

File Form 5500

The form is due 7 months after the end of the plan year.  The due date can be extended as described above under Form 5558.

-no extension requested
-corporate extension(see Note directly above)
-extension filed (Form 5558)

Note: Remember, if you have a DB plan and use a Company intranet to communicate benefit information; you must post certain information from the 5500 on the intranet.

7/31
9/15
10/15

EBSA

Summary Annual Report

The Summary Annual Report (SAR) is due within two months of the filling of the Form 5500

-no Form 5500 extension requested
-corporate extension(see Note above)
-extension filed (Form 5558)

Note: For 2009 and following the SAR for defined benefit plans is replaced by an annual funding notice.

9/30
11/15
12/15

participant
beneficiaries

Summary of Material Modifications

A summary of any material modifications to the plan must be provided to participants and beneficiaries receiving benefits no later than 210 days after the end of the plan year in which the change was effective unless the changes are provided in an updated SPD.

7/31

participant

beneficiaries

PBGC Form 1

Used by defined benefit plans subject to termination insurance to pay flat and variable rate premiums, reconciliation filing and by multiemployer plans as applicable.  Must be filed within 9 ½ months after plan year begins.

10/15

PBGC

Last day to make corrective contributions
(QNEC, QMAC)

401(k) plans which failed the ADP/ACP test in the prior plan year and if permitted in the plan document must make any corrective employer contributions by the last day of the 12^th month after the end of the plan year in which the failure occurred.

12/31

contribution to Plan

Last day to correct excess contributions and
excess aggregate contributions

401(k) plans which failed the ADP/ACP test in the prior plan year and for which no corrective employer contributions will be made, must distribute any excesses by the last day of the 12^th month after the end of the plan year in which the failure occurred. The plan sponsor will be subject to a 10% excise tax on the excess.

12/31

participants

Minimum distributions

Annual minimum distributions must be made to affected participants/beneficiaries.

12/31

participants
beneficiaries

Periodic benefit statements

Defined Benefit plans:

·         At least once every three years to each participant with a non-forfeitable accrued benefit who is employed by the employer maintaining the plan at the time the statement is to be furnished. Information furnished is based on reasonable estimates as determined jointly by the DOL and PBGC.

·         The annual benefit statement requirement will be considered met if at least once a year the plan administrator provides a notice to participants regarding the availability of the benefit statement and how to obtain it.

Defined Contribution Plans:

·         Provided quarterly to participants or beneficiaries who have the right to direct investments

·         Provided at least once per calendar year to participants who have their own accounts but do not have the right to direct investments.

Effective for plan years beginning after 12/31/2006

Within 45 days following end of each quarter

The earlier of the date on which the Form 5500 is filed or the date, including extensions for the Form 5500 filing.

participants