• Written Plan Document

Description: Eligibility provisions, benefits, applicable limits, products available in the plan, time and form of benefit distributions.

Legend's Support Capabilities: Legend has been supplying plan documents for ERISA §403(b) plans, discriminatory §403(b) plans and §457 plans for many years and has developed plan documents for use in the public school market—the Model Plan and the Model Plan Plus. In the §501(c)(3) market, we will offer an ERISA and a non-ERISA plan.

• Optional features in plan documents

Description: Hardship distributions, loans, acceptance of rollovers and plan-to-plan transfers, in-service transfers to approved vendors, in-service distributions* at age 59½, exchanges to non-approved vendors.

Legend's Support Capabilities: Legend has always monitored these provisions with its proprietary software systems and can aid a District in its oversight duties.

• In-service transfers

Description: If adopted in plan document, employees may transfer between approved products at any time. Approved vendors must communicate such transfers to the employer or plan administrator.

Legend's Support Capabilities: Legend can assist an employer by monitoring in-service transfers or act as plan recordkeeper.

• Exchanges (old 90-24 transfers)

Description: If adopted in plan document, non-approved vendor must sign agreement with employer to communicate with the employer or the employer’s plan administrator on distributions and loans.

Legend's Support Capabilities: Legend can assist an employer by providing a §403(b) Exchange Agreement or act as plan recordkeeper.

• Plan-to-plan rollovers and transfers

Description: If adopted in plan document, employees may transfer/roll accounts to and from other eligible retirement plans.

Legend's Support Capabilities: Legend can assist an employer by monitoring such rollovers and transfers or act as plan recordkeeper.

• Failure to satisfy §403(b) or §415 contribution limits

Description: Annuities must segregate excess contributions in separate §403(c) accounts; custodial accounts must treat excess contributions under §62, §83 or §402(b) – in other words, the vendor must segregate the excess and the excess is immediately includible in the employee’s gross income or the employee’s whole §403(b) account could be disqualified.

Legend's Support Capabilities: Legend already notifies our clients and employers of possible excesses in October each year and after year-end. This includes employees for whom we perform common remitting of contributions. Going forward, we can assist an employer in monitoring contributions or act as plan recordkeeper.

• Qualified Domestic Relations Orders

Description: Qualified Domestic Relations Orders (QDROs) – the division of assets in divorce proceedings – are required for §403(b) assets – this must be a provision of the plan document.

Legend's Support Capabilities: Legend can assist an employer in reviewing QDROs or act as plan recordkeeper.

• Restrictions on distributions

Description: No earlier than participant’s severance from employment or upon occurrence of some event, such as after a fixed number of years, the attainment of a stated age or disability.

Legend's Support Capabilities: Legend can assist in reviewing the annuity contracts for inclusion of the proper language.

• Contribution remittance deadline

Description: Requirement that elective deferrals be remitted to vendors as soon as administratively possible – the plan document should specify a period after the date the amounts would otherwise have been paid to the participants (15 business days is suggested in regs).

Legend's Support Capabilities: Legend can assist in monitoring timeliness of deposits.

• Universal availability requirement

Description: Employers must give written notice each year to employees of the right to participate in the plan, and, if excluding employees who work less than 20 hours per week, those employees must actually work less than 20 hours per week and less than 1,000 hours per year – cannot exclude on basis of class such as temporary or part-time.

Legend's Support Capabilities: Legend will supply sample written notice and posters to satisfy this notification requirement.

Distributions from a retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.