Additional Administration Services

Additional administration services may be required at the option of the employer, as a result of employer and/or trustee action or inaction; and/or as a result of alternative investment approaches selected by the employer and/or trustee(s). Certain plan types, such as Defined Benefit Plans and Employee Stock Ownership Plans also require administration functions in addition to those functions applicable to all plans.

Certain employer and/or employee initiated transactions also result in additional administration requirements. These consist primarily of employees electing to participate in the plan, terminating employment, requesting plan loans, and applying for in-service withdrawals. Other special services include: processing 'rollover' contributions for employees transferring account balances from prior employers' plans; complying with court orders in marital dissolution proceedings; and processing legally mandated in-service distributions to employees over age 701/2.

Additional Administration Services possibly applicable to any plan:

• Extension of Time to File.

  Preparation and filing of Form 5558, Application for Extension of Time to file Annual Return and accompanying schedules.

• Variable Employer Contribution Scenarios.

  Calculating and analyzing multiple employer contribution scenarios, in order to provide a range of alternatives for budget and planning purposes.

• Custom Reporting.

  Development and provision of customized reports and schedules at client's or trustee's request.

• Representation Before Regulatory Agencies.

  From time to time, either the Internal Revenue Service or the U. S. Department of Labor may request additional information or clarification in relation to forms 5500 and related schedules or 945. These agencies may also conduct regulatory audits of plans. Such audits may be completely random or may be triggered by plan and employer characteristics. In such cases, Spectrum will represent clients in providing information and data, liaising with agency personnel to clarify information, and/or provide analyses to support client's position. For defined benefit plans, such representation may also be necessary in dealings with the federal Pension Benefit Guaranty Corporation (PBGC).

• Voluntary Correction Programs.

  In cases where Spectrum is retained to assume responsibilities for an existing plan, and discovers compliance failures or is retained as a result of the prior discovery of such failures, Spectrum, in conjunction with a plan's legal counsel, will analyze the situation, reconcile or reconstruct the records of a plan's operation and prepare submissions to the relevant agencies under the provisions of such agencies' published Voluntary Correction Programs.

Routine Additional Administration Services applicable primarily to defined contribution plans include:

• New Employee Elective Enrollments.

  Provision of enrollment packets for newly eligible employees and processing enrollment elections.

• Employee Terminations.

  Processing employee terminations, including preparation of Statements of Termination Benefits, preparation and distribution and election forms, following up to obtain employee elections, and processing distributions.

• Rollover Contributions.

  Processing incoming rollover contributions, including if applicable, investment elections.

• Hardship Withdrawals.

  Processing hardship withdrawal requests and initiating distribution of proceeds.

• Participant Loans.

  Preparation of loan illustrations, amortization schedules, loan origination documentation, distribution of loan proceeds and instructions for loan repayments.

• Loan Maintenance and Reporting.

  Verification of loan payments, documentation of repayment components, allocation to participants' accounts in accordance with elections, and preparation of loan schedules for employer and trustee reporting purposes.

• In-service Distributions.

  Processing elective and mandated in-service distributions for participants, in accordance with plan provisions.

• QDRO Processing.

  Preparation of documentation in relation to Qualified Domestic Relations Orders issued by State courts in the case of marital dissolutions, including responses to orders, segregation of plan assets and creation of spousal accounts or processing distributions, as required.

Additional Administration Services applicable only to Employee Stock Ownership Plans (ESOPs) include:

• confirming and documenting that valuation and revaluation of non-listed employer securities is made in accordance with applicable federal requirements;
• updating participant records to reflect revaluation of shares in the case of non-listed employer securities;
• production of information and proxy forms for pass-through voting of shares; -determination of eligibility for special ESOP diversification elections;
• preparation of ESOP diversification information and individual illustrations;
• processing participants' diversification elections; and
• verifying share redemption in accordance with participant diversification elections and allocation of proceeds in accordance with such elections.

  Additional Administration Services applicable only to Defined Benefit Plans, including 'Cash Balance Plans' include:

  • production of individual illustrations of accrued and projected benefits;
  • calculation of spouse's pensions to be paid on a participant's death, either during employment or after termination or retirement;
  • notification of upcoming eligibility for benefits such as early or normal retirement benefits;
  • production of data for renewal of insured ancillary benefits such as death (lump sum) benefits or survivor income benefits;
  • calculation of applicable maximum benefit limits applicable to each eligible participant;
  • annual actuarial valuations to determine accrued and projected plan liabilities, funded status, and amounts of employer contribution required to satisfy minimum funding standards;
  • preparation and filing of Form 5500, Schedule B, with certification by an Enrolled Actuary, as required under the provisions of ERISA;
  • where applicable, calculation of premiums due to the Pension Benefit Guaranty Corporation;
  • liaison with auditors and provision of data for plan and company financial reporting, including, as applicable, SFAS Numbers 35, 87, 88, 106 and 112 disclosure information.