Copyright © 2007, The American College. All rights reserved. Used with permission. Planning for Retirement Needs Plan Installation and Administration, Chapter 13

Copyright © 2007, The American College. All rights reserved. Used with permission. Overview Setting up a plan Administering a plan Keogh plans Software

Copyright © 2007, The American College. All rights reserved. Used with permission. Setting Up a Plan Corporate resolutions Plan and trust documents Explain plan to employees Enrollment meetings Advance-determination letters Notice to interested parties SPD (next slide)

Copyright © 2007, The American College. All rights reserved. Used with permission. SPD Clear and simple description Complete description of plan terms 120 days after adoption date See text for more details

Copyright © 2007, The American College. All rights reserved. Used with permission. Forms 5500 No filing required Form 5500EZ Form 5500 Schedules –A, insurance —B, actuarial –H & I, financial information –P, trustee Timing: 7 months after plan year end, 2-1/2 month extension

Copyright © 2007, The American College. All rights reserved. Used with permission. Other Requirements PBGC—Form 1 file 7 months after plan year SAR—Summary of Form 5500 SMM—Notice of changes to SPD Benefit statements Distributions

Copyright © 2007, The American College. All rights reserved. Used with permission. Periodic Administrative Issues QDRO –Plan pays out benefits upon divorce –Decree must satisfy qualification requirement Compliance problems –EPCRS –Voluntary Fiduciary Compliance –Delinquent Filers

Copyright © 2007, The American College. All rights reserved. Used with permission. True/False Questions The first step in adopting a qualified plan is to communicate the plan to employees. Contributions for the first year must be made by the last day of the first plan year. With a corporation, the board of directors adopts both the plan and trust agreements. It is important to include a disclaimer in the SPD stating that the terms of the plan prevail if there is a discrepancy between the plan and the SPD.

Copyright © 2007, The American College. All rights reserved. Used with permission. True/False Questions The notice to interested parties is a summary of relevant plan provisions that is given to participants. The SPD must be distributed within 120 days after the plan is adopted. Form 5500EZ is the annual return/report form to be filed by any plan that has fewer than 100 participants.

Copyright © 2007, The American College. All rights reserved. Used with permission. True/False Questions A summary of material modification notifies participant of basic financial information about the plan. A qualified plan is never allowed to pay benefits to anyone other than the participant or death beneficiary under the anti-alienation rules.

Copyright © 2007, The American College. All rights reserved. Used with permission. True/False Questions (new) Every qualified plan must file a Schedule B along with Form 5500 each year. A plan that only covers a consultant who is self- employed that has $25,000 of plan assets does not have to file Form 5500 or Form 5500 EZ. If a plan changes the eligibility provision participants must be given a summary of material modification or an updated SPD.