Sample Plan Comparison for Plan Mergers (00389270)
SUMMARY OF PLAN PROVISIONS - DEFINED CONTRIBUTION PLANS
CLIENT NAME: ABC CLIENT #:10623.450
PLAN NAME: ABC 401(k) Plan PLAN NO.: 001PYE: __12/31______FYE: ______
PREPARED BY: LAR DATE: 10/25/2014
DOCUMENT/AMENDMENT TYPE: / ABC 401(k) / Target 401(k)DATES:
Effective / April 26, 2013 (originally effective 7/1/07) (BPD pg. 1) / January 1, 2014 (BPD pg. 1)
Adopted / May 23, 2014 (adopting resolution) / January 28, 2014 (board resolution pg. 2)
Anniversary / Last day of the Plan Year (BPD pg. 2) / Not defined (BPD pg. 5)
Limitation Year / January 1 – December 31 (BPD 9) (Plan Year) / Not defined (BPD pg. 9)
Valuation / Anniversary Date and may include any other date or dates deemed necessary or appropriate by the Administrator for valuation of the Participant’s Accounts during the Plan Year (BPD pg. 11) / Each day the New York Stock Exchange is open, and any other day as the Committee may deem. (BDP pg. 15)
FDL:
Rec’d for this document? / Volume submitter plan; may not have separate FDL / Yes
Type of FDL Received
/ Applicable to the amendments executed: 1/2/04, 5/25/05, 3/22/06, 11/3/06, 6/18/07 & 8/23/07, 12/20/07, 1/25/08, 3/27/08, 9/03/08, 12/21/09, 12/21/10, 5/12/11, and 7/21/1. It is applicable to the IRS’ review of the Plan and associated amendments associated with amendments submitted with the application. (Determination Letter)Date of FDL / March 4, 2014 (Determination Letter)
TRUSTEES: / Wilmington Trust Retirement and Institutional Services Co. (Schedule D) / State Street Bank and Trust Company (Trust Agreement executed 2001)
PLAN ADMINISTRATOR: / ABC (BPD pg. 12) / Plan Committee (BPD pg. 6)
PARTICIPATING EMPLOYERS: / None.
Plan allows an Employer who adopts the Plan pursuant to Section of 10.1 of Plan. (BPD pg. 10) / Target
COVERAGE OF OTHER CONTROLLED/AFFILIATED ENTITIES / BPD pg. 48: Only if adopt plan
ELIGIBILITY (note if different for different parts of the plan):
Minimum Age / 21 (BPD pg. 14) / Same (BPD pg. 16)
Minimum Service / 6 months (BPD pg. 14) / One hour of service (BPD pg. 16) for deferrals; one year of service for Matching contributions (BPD pg 16)
Exclusions / 1) Union Employees 2) Employee of Affiliated Employers unless the Affiliated Employers has adopted the Plan in writing; 3) Employees who became employee as a result of 410(b)(6)(C) [acquisition] transaction until the expiration of the transition period beginning on the date of the transaction and ending on the last day of the first Plan Year beginning after the date of the transaction; 4) any individual not on the payroll record as a common law employee; and 5) Nonresident aliens . (BPD pg. 5) / 1) Union Employees unless the collective bargaining agreement provides for such Employee to be eligible for participation in the Plan; 2) Residents of Puerto Rico whose worksite location is in Puerto Rico; 3) Leased Employees; 4) Nonresident Aliens; and 5) effective for periods before January 1, 2014, any Employee whose worksite location is on Puerto Rico. (BPD pg. 7)
Also excluded independent contractors even if reclassified by court, etc. (BPD pg. 7)
Entry Dates / First day of the Plan Year quarter coinciding with or next following the date such Employee met the eligibility requirements / Eligible Employee can become Participant in plan as soon as administratively practical thereafter, subject to certain “historic rules.” (BPD pg. 16)
Year of Service Definition/Computation Period for Vesting / Computation period of 12 consecutive months during which an Employee has 1000 Hours of Service. (BPD pg. 11)
For vesting purposes: computation shall be the Plan Year, including periods prior to the Effective Date of the Plan. (BPD pg. 11) / Year of Vesting service: Plan Year with 1,000 hrs (BPD pg. 15)
Years of Service for Match Contribution Service: 12 month measuring period wherein the Employee completed 1,000 Hours of Service. Measuring Period: is the period beginning on the date the Employee first completes an Hour of Service and thereafter measuring periods are each Plan Year starting with the first Plan Year that begins after the date the Employee first completes an Hour of Service. NOTE: Employee will not be credited with a Year of Service for Match Contribution until the measuring period has ended regardless of whether he/she completes 1,000 Hours of Service earlier in the measuring period. (BPD pg. 15)
HOURS OF SERVICE DEFINITION: Actual, Equivalency (how) / Equivalency Method: 190 Hours of Servicefor each month in which the Employee is entitled to payment or paid for at least one Hour of Service(BDP pg. 7) / Actual hours(BPD pg. 8)
Employees whose Hours of Service are not determinable by the above, use 45 Hours of Service for each week of employment or such other number as determine by the Committee in accordance with the DOL Reg. Sec. 2530.200b-3(e). (BPD pg. 8)
NORMAL RETIREMENT:
Age / 65 (BPD pg. 9) / Not specifically defined but full vesting granted at 65 (BPD pg. 55)
Date / Participant’s 65th birthday (BDP pg. 9) / Not defined (BDP pg. 9)
EARLY RETIREMENT:
Age / None (BPD pg. 33) / Not defined (BDP pg. 6)
Date / None / Not defined (BDP pg. 6)
Effect / N/A / N/A
COMPENSATION: (note if different for different parts of plan) / “Compensation: W-2
“415 Compensation”: IRS Code Section 3401(a) (BDP pg. 6)
414(s) Compensation: 415 Compensation or any other definition of compensation that satisfies the nondiscrimination requirements of Code Section 414(s). Must be determined in the Plan Year or calendar year ending within the Plan Year. (BDP pg. 6) / W-2 plus adjustments (see 1.415(c)-2(d)(4).
Include deferrals? / Yes(BPD pg. 3) / Yes (BPD pg. 12)
Exclusions / (BPD pg. 3)
Reimbursements of other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits
If Employees are excluded from the Plan, or any component of same, the Compensation for such Employee who becomes eligible or ceases to be eligible to be eligible to participate in Plan, or a component of same, shall only include Compensation while such Employees are Eligible Employees of the Plan, or a component of same. / (BDP pgs. 11-12)
1) Allowances and Fringe Benefits (whether post or pre tax);
2) Benefits and distributions made under any employee benefit plan, whether qualified or non-qualified;
3) Deferrals and other contributions to nonqualified deferred compensation plan;
4) Equity compensation or other stock- based awards granted to the Employee by the Employer;
5) Imputed income, including noncash payments, tips that are not paid directly by payroll, noncash fringe benefits and awards, and the imputed value of excess group life term insurance;
6) Tax gross-ups;
7) Payments by third parties including worker’s compensation, or
8) Severance and post-termination pay.
For first year / Participation comp only / Full year (BPD p. 31)
HCE: Top 20% Rule?
/ No (BDP pg. 6) / Yes. (BDP pg. 32) “Top-paid group”ACCOUNTS:
Deferrals / Elective Deferral Account (BPD p.1) / Pre-Tax Account (BPD p 41)Match / Matching Contribution Account (BPD p.1) / Employer Match Account (BPD p 41)
Profit Sharing / N/A / n/a
After-Tax Voluntary / N/A / No
QNEC/QMAC / Qualified Matching Contribution Account; Qualified Nonelective Contribution Account / (Although the plan provides for these contributions, it does not specify an account)
Rollover / Rollover Account / Rollover Account (BPD p. 41)
Other / Transfer Account [Plan to Plan Transfers (BPD pg. 29)]
PS CONTRIBUTION FORMULA (discretionary/fixed) / None / None
Profits needed? / N/A / n/a
PS ALLOCATION FORMULA / N/A / n/a
If integrated:
Base percent
Excess percent
Integration level / N/A / n/a
Eligibility: / N/A / n/a
401(k) INFORMATION
Maximum deferral %/$ (other than 402(g), 415) / maximum: legal limit
Employer may impose a 1% elective deferral minimum for all Employees (BPD pg. 17) / Pre-tax Contribution (BDP pg. 19): between 1% to 50% of the Participant’s Plan Compensationfor the payroll period
Can be any amount or must be whole percent? / Not specified. / Whole percent (BPD pg. 19)
Bonus election? / Not specified / No
Eligibility / Age 21; 1 hour of service
Comp for n/d testing: / 414(s) / 415 Comp (BPD, pg 32)
Frequency of deferral changes allowed / anytime / anytime
Safe Harbor 401(k)/401(m)? / None. / Yes
(
If SH, contrib type (basic match, enhanced match, NEC) / n/a / QACA Match
Can employer act to limit HCE deferrals? / Yes. (BPD pg. 24) / Yes. (BPD pg. 33)
Catch-up Contributions permitted? / Yes (BPD pg. 17) / Yes (BPD pg. 25)
Roth 401(k) permitted? / No / No
Prior year/ current year testing / Py (P. 21, Section 4.5(f), p. 24, Section 4.7(e)) / Disaggregated testing for participants with < 1 YOS (ie not eligible for match) and unions; current year testing
BPD pgs. 29-33
For ACP: aggregate SH match and discretionary match; uses current year
EMPLOYER MATCHING CONTRIBUTIONS FORMULA: / 50% of deferrals / 100% of the Pre-Tax Contributions made by the Participant each payroll period up to 1% of the Participant’s Plan Compensation for the payroll period, and 50% of such Pre-Tax Contributions made on behalf of the Participant each payroll period up to the next 6% (i.e., 7% total). (BPD pg. 26); with true-up at year end
Plus available discretionary match for those who are credited with 1000+ hours of service
Maximum % or amount of compensation to match / 6% (BDP pg. 16) / See above, but max match occurs at 7%
Match on deferrals, vol. ctbs, both / Match on deferrals (BDP pg. 16)
No Match on Catch Up (BDP pg. 16) / Match on Deferrals (BDP pg. 26)
Match on Catch Up (BPD pg. 25)
Eligibility / None / Must complete one Year of Employer Match Contribution Service (BDP pg. 16)
Allocated: per pay period, end of year, other / Payroll period (BDP pg. 16) / Payroll period (BPD pg. 19) but with true up
QNECs/QMACs FORMULA: / To meet ADP/ACP tests
Corrective only/discretionary / Can use QNEC/QMAC as corrective measure if use current year testing method within 12 months after the end of the Plan Year to correct ADP test. (BPD pg. 22) If prior year testing method used, cannot use QNEC/QMAC to correct failed ADP test, (BPD pg. 22) / QNEC/QMAC Discretionary (BPD pg. 35) however does not state with specificity how to be used- “any [QNEC/QMAC] to the Plan shall be allocated in the manner prescribed by Company and consistent with the applicable regulations to the Accounts of some or all of those Participants who are non-highly compensated Eligible Employees …. for the Plan Year with respect to which such” contributions were made.
Eligibility / Can limit to NHCEs only (p. 19) / Not defined (BPD pg. 35-36)
Allocation formula / Flexible; BPD pg. 22-23 (??) / Not defined (BPD pg. 35-36)
ESOP?
If yes, leveraged? / No. / No
EARNINGS ALLOCATION: / Participant directed / Participant directed
FORFEITURES:
Use of forfeiture (reduce, reallocate, add to ctb) / ANY forfeitures: reinstate previously forfeited Account balances of Participants; used to satisfy any contribution that may be required or used to pay administrative expenses. (BPD pg. 19)
Forfeitures attributed to Matching Contributions will be used to reduce the Employers Matching Contribution for the Plan Year. (BPD pg. 19). / Restore accounts, pay expenses, reduce employer contribution or “any other legally permissible purposes” (BPD pg 52)
Timing of Forfeiture / Earlier of: (a) distribution of vested account; or (b) last day of PY in which 5 consecutive BIS unless eligible to share in allocation for that year – if so, forfeit the following year; use in plan year following year of forfeiture (BPD p.6) / Asa administratively feasible after earlier of (a) distribution of vested interest; or (b) date of 5 consecutive breaks in service (p. 51); also authorizes forfeiture for lost participant or beneficiary subject to reinstatement if located [bpd p. 59]
Eligibility for Allocation / n/a / n/a
VESTING
Schedule – Discretionary PS / n/a / n/a
Schedule – Matching / 2 years of service = 25%
3 years of service = 50%
4 years of service = 75%
5 years of service = 100%
(BPD pg. 34) / 2 year vesting rule (BPD pg. 51)
100% Vesting regardless of Participant’s number of Years of Service / Elective Deferral Account, Qualified Matching Contribution Account, and Qualified Nonelective Contribution Account (BDP pg. 33) / Pre-tax Account, Rollover Account. (BPD pg. 51)
100% vesting events (death, disability, etc.) / Death(BPD pg. 32) / Death while employed
Total and permanent disability while employed
(BPD pg. 51)
Year of Service Definition/ Computation Period / PY during which an Employee has at least 1,000 Hours of Service. (BPD pg. 11)
Excluded service time period: Years of service before the age of 18 are excluded for vesting purposes under the Plan (BDP pg. 34) / PY in which an Employee complete 1,000 or more Hours of Service. (BPD pg. 15)
DISTRIBUTIONS:
Timing: at Term, BinS, 5BinS, NRD) / as soon as administratively feasible after termination of employment and request by participant; (BPD pg. 33) / as soon as administratively practicable after the date of the Participant’s termination of employment. (BPD pg. 54).
Form of Distribution / Single sum (BPD pg. 34); direct rollover applies at $1,000 / Single lump sum unless the Participant or Beneficiary elect to receive the distribution in installment payments, which may be taken in approximately equal monthly or annual installments over a fixed period not to exceed 20 years. (BPD pg. 54)
Participant can elect at any time to turn monthly or annual installments into a lump sum equal to the value of the remaining unpaid installments. (BPD pg. 54)
If Participant dies before all installments are paid, Beneficiary can receive single lump sum OR continue with installment form elected by Participant. (BPD pg. 54)
Auto rollover at $1,000
Cash/Property / Cash (BPD pg. 36) / Cash. (BPD pg. 54)
QJSA provisions? / No / No
DISABILITY
Defined / n/a - no benefits available. / Receipt of payments from LTD or SS (as of 1/1/2014); previously, inability to engage in any substantial gainful activity (BPD, page 14)Effect / No disability benefits other than those payable upon termination of employment provided under the plan (BDP pg. 33) / Full vesting
DEATH BENEFITS / Full account in a lump sum; MRD rules only limitations / Full vesting; payable as soon as administratively practicable after the first Valuation Date coinciding or following the Participant’s death. If Beneficiary is Participant’s spouse then distribution can be deferred until as late as the date on which the Participant would have turned 70 ½ years of age.
Participant dies before all installment payments have been made: (BPD pg. 54) remaining value of unpaid installment benefits will be paid in single lump sum unless Beneficiary elects to have the installment payment continue.
PREDECESSOR SERVICE:
Eligibility, Vesting
Name of predecessor / No / No
VOLUNTARY AFTERTAX CONTRIBUTIONS ALLOWED? / No / No
ROLLOVERS ACCEPTED?
If yes, from all employees or only participants? / Direct Rollovers: Yes (BPD pg. 30) only for participants
Distributable anytime / Okay before entry (and P is a limited p for this purpose) (BPD p. 16)
Accepted from plans other than 401(a) qualified? / Yes (BPD pg. 30) “eligible retirement plans” include: retirement plans under 408(a), 408(b) [no endowment contract], annuity plan 403(a), eligible deferred compensation plan 457(b), annuity contract 403(b) / Qualified plans and qualified annuity plans without after-tax amounts (BPD p. 38)
PARTICIPANT LOANS ALLOWED? / Yes (BPD pg. 42) / Yes (BPD pgs. 63-64).
IN SERVICE DISTRIBUTIONS:
401(k) hardship: (if yes, SH/SH?) / Yes (BPD pg. 39) Uses Safe Harbor definition of hardship (BPD pg. 39) / Yes (BPD pg. 60). Uses Safe Harbor definition of hardship (BPD pgs. 60-61)
PS hardship? / No / No
AP in QDRO? / Yes (BPD pg. 40) / Yes (BPD pg. 78)
At retirement? / Yes, available at 59-1/2 / Yes, available at 59-1/2
At 59-1/2? / Yes (BPD pg. 38) / Yes, (BPD pg. 62)
Other? / No / Yes. 90-day permissible withdrawal rules for deferrals (BPD pg 20); anytime for rollovers (BPD p.62)
EMPLOYER STOCK IN PLAN?
If Yes, unitized or per share?
/ No / No.Pass-through voting? / N/A / n/a
Distribution in kind? / N/A / n/a
ELECTION NOT TO PARTICIPATE / Irrevocable (BPD pg. 16) / Not Irrevocable (BPD pg. 21)
SELF-DIRECTED INVESTMENTS?
/ Yes (BPD pg. 30) / Yes (BPD pg. 44)404(c)? / Yes (BPD pg. 31) / Yes (BPD pg. 45)
Investment Elections / The Administrator will establish Participant Direction Procedures which will include instructions on how often changes in investments can be made. (BPD pg. 30) / Investments can be changed at any time. (BPD pg. 45)
Default Fund / No / Yes (BDP pg. 45)
Unlimited brokerage option? / No / No
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