Plan Selection and Administration Flashcards
What is included in overall compensation
cash
disability benefits
voluntary benefits
retirement benefits
medical benefits
life insurance
GOAL of compensation packages
attract/retain competent EEs and reward good performance
why is it important to wttract and retain EEs
need educated EEs who are willing to do the job
want to avoid turnovers
encourage EE performance to improve
the selection process can be time-consuming and expensive
Plan selection process from ER POV
- determine business needs
- find out what EEs want
- cash flow considerations
- admin costs
- owners business and personal objectives
The plan document
- impacts tax benefit
- must be written, funded, and adopted by due date of tax return
Types of plan documents
- individually designed
- master design
- prototype design
Initial Notification to EEs already employed
sent to eligible ees and inneligible ees who work at the same location as eligible ees
goal: bring awareness and explain benefit and why ee would want it
Initial notification helps an ER comply with
non discrimination laws
Initial notification needs to be sent
between 7-21 days before filing with IRS
10-24 days if by mail
master design plan doc
- single trust used by multiple ERs with the same broker
prototype design plan doc
- ERs establish heir own trust using the same plan document
Notification to new EEs need to be sent
within 90 days after EE becomes participant or 90 days after EE receives benefit.
or within 120 days of plan establishment and within 120 days of end of plan yr after amendment are adopted
Ongoing notifications
provide defined contribution statements to those with investment authority quarterly (annually for others)
disqualified persons
plan fiduciary
plan sponsor
service provider
owners and partners of plan sponsor
Prohibited transactions include
transfer of assetts
self dealing
corruption
