Calculations for Active Plan Members
Employees make deferral deposits directly from their wages into various investments. We require from your company salary data as wages are paid. If you use a payroll service we will get our data directly from them. We will review the amounts withheld, calculate the company matching amounts due, and direct the deposits of these funds to each investment account within two working days from receipt of your salary data.
Entry for New Plan Members
We further require information as new employees enter the plan. For new employees we require a completed enrollment application, electing wage amounts to be deferred and the allocation of those moneys between the various investment options. Along with your investment advisor, we are available to discuss this election with new employees. These employees will be included in the first pay period coincident with or subsequent to their plan entry dates. We will calculate plan entry for new participants each quarter or as the plan document requires.
Distribution of Accounts for Former Plan Members
We also require information as employees are separated from service with your company. We request from your company completed employee termination forms that we provide. From these forms we will compute the amounts and dates that payments are due your former employees from the plan. Termination forms are needed for retirement, death, disability and other separation of service or withdrawal from the plan. We supply these forms for your use and are available to assist in their completion.
Account Activity Information
We require from your company or your investment advisor information regarding activity in each of the investment accounts so that participants may receive their quarterly statements in a timely manner. After we receive this data you will have completed employee benefit statements for distribution to your member employees. Often we can get duplicates of the statements from the investment companies directly and require nothing from your company. Also, if you use our daily valuation system, this information will already be supplied to us.
401(k) Plan Discrimination Testing
The amounts deferred in a 401(k) plan are restricted for higher paid employees, depending on activity within the lower paid group. These nondiscrimination tests are run periodically during the plan year so that there is a lesser flurry of activity at year’s end. At year end, we require a completed nondiscrimination questionnaire. We will run this final test within five working days of receipt of the completed questionnaire. From this report certain adjustments might be required. There are various means of dealing with the test results. If needed, we will meet with your staff immediately to discuss these options.
Plan Top Heavy Testing
Each plan must be evaluated annually to determine if account balances on behalf of key employees exceed sixty percent of all account balances. This determines whether the plan is “top heavy”. We will make this evaluation based on data already received from other sources and send a report to you at the beginning of each plan year for your approval and return signature.
Employer Profit Sharing Contributions
If your company also includes a profit sharing contribution, we will calculate the amount of profit sharing deposit within five days of receipt of a completed employee census form. Under most circumstances, your payroll service can provide this census information directly. We will also provide a corporate resolution for your completion and return if there is a discretionary amount of deposit.
Government Forms and Year End Reports
From the census report data and the investment report data, we will calculate vesting for each employee, profit sharing allocations, forfeiture allocations from nonvested employee distributions, and final account balances. This final report and the government forms that are required will be completed and submitted to your office for signature within thirty days of receipt of the final data. We request return of these government forms. We will review them for proper signatures and file them directly by certified mail with the Internal Revenue Service within three days after they have been returned to our office.
Please click on our Forms Library Page to access printable forms.
Authorized Distribution of Reports
As directed and authorized by you, we will send copies of all returns and reports to your accounting firm and your principal investment advisor.