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EMPLOYER-SPONSORED PLAN
THIRD PARTY ADMINISTRATOR (“TPA”) AND RECORDKEEPING SERVICES SCHEDULE VERSION 1.0
The terms and conditions of this Service Schedule apply upon your election to receive TPA Services or Recordkeeping Services or both from HSR to support your employer-sponsored retirement plan (“Plan”) and are applicable to the provision of those services. We will provide the Services you have elected, which are available either on a “bundled” or “à la carte basis,” by submitting a Service Order and agreeing to pay applicable fees and charges.
1. Document Services.
1.1. Plan Documents. If you elect to receive Plan Document Services, HSR will prepare a plan and trust document that has been pre-approved to comply with applicable provisions of the Internal Revenue Code (“Code”) for your review and signature. In addition, HSR will prepare a Summary Plan Description (“SPD”) for distribution to your employees. You agree to familiarize yourself with the terms of the plan and acknowledge that, unless you have elected for HSR to serve as the ERISA Section 3(16)(A) administrator of your plan, as provided in Section 1.5, below, you are responsible for serving as plan administrator.
1.2. Plan Amendments. As authorized by you from time to time, and as required to maintain compliance with the Code, HSR will prepare and provide Plan amendments and related materials to you for review and approval. To the extent that HSR, as sponsor of the pre-approved Plan document you have adopted, is permitted to adopt certain standardized changes on your behalf, HSR will do so; in all other cases, your assistance will be required to complete the adoption of amendments. In addition, where appropriate, HSR will prepare and provide to you a summary of material modifications (“SMM”) to the summary plan description to reflect Plan amendment changes.
1.3. Plan Termination. Upon your request, HS will (i) prepare the documents needed to terminate the Plan; (ii) prepare and file the IRS forms for obtaining a favorable determination letter; and (iii) prepare a final form 5500 Return/Report.
2. General Services.
2.1. TPA Services. If you have elected to receive general TPA Services, there will be a monthly fee for these services billed on a monthly or quarterly basis. These services will include:
2.1.1. General servicing of the account, Trustee review meetings & preparation, Review of withdrawals and distributions for Code and Plan rule compliance, and coordination with the plan sponsor on any questions or concerns.
2.1.2. General customer service, performing simple calculations if required, periodic phone calls and emails, plan provision questions, interpretation of recent legislation, seminars, and education on new legislation, plan document support, resolution of issues pertaining to mergers, acquisitions, and control groups or other corporate changes that may impact the plan.
2.1.3. General Issue resolution including, compensation classification questions and issues, employees entering or leaving the plan, loan eligibility, vesting schedules, plan provision explanations, training for key personnel on plan operations and addressing turnover, support for enrollment meetings and materials, client meetings, developing and keeping plan materials up-to-date, posting of the material through the portal when applicable, loading payroll files for HowardSimon Recordkeeping when applicable, 360+ portal integration when applicable, troubleshooting and resolving data issues, coordination with the recordkeeper to maintain data integrity when applicable, Notice & Disclosure preparation and distribution when applicable, brokerage account and plan account handling as needed, consultation with interested third parties, such as CPA’s, Attorneys, etc, as authorized by the client.
2.1.4. If you have elected hardship and distribution eligibility support services, we will assist you in determining eligibility for hardship or other distributions, including exclusion from eligibility to make deferrals following a hardship distribution, and assist you in making distributions of benefits from the Plan to eligible participants and beneficiaries.
2.1.5. If elected by you, we will support Qualified Domestic Relations Order (“QDRO”) Processing and Reporting
2.1.6. If elected by you, we will support required minimum distribution (“RMD”) processing and will pay RMDs to participants and beneficiaries.
2.1.7. If elected by you, we will prepare your Plan’s summary annual report.
2.2. Tax Form Services. If you have elected to receive annual Tax Form services, each year, HSR will request information from you for purposes of maintaining the Plan’s compliance with the Code. This information request may include, but is not limited to: employee census data, trust accounting for the year and updated information about you and your businesses, and/or all controlled or affiliated service group information. You acknowledge that (i) you are responsible for providing complete and accurate data; and (ii) HSR is entitled to rely on the data you provide and assumes no duty or obligation to audit or otherwise verify the accuracy of that information.
2.2.1. Upon receipt of complete information from you, and subject to your election to receive ongoing Code compliance support services, HSR will (i) verify that participants were admitted to the Plan as of the date on which they became eligible for participation in the Plan; (ii) calculate contributions and/or forfeiture allocations; and (iii) perform any required testing; including but not limited to the following: coverage testing under Code section 410(b); non-discrimination testing under Code section 401(a)(4); for plans that have not elected a “Safe Harbor” platform, ADP and ACP testing under Code sections 401(k) and 401(m), including identifying highly compensated employees and/or necessary corrections for failed tests; monitoring for maximum deferral limitations under Code section 402(g); determining any participants eligible for catch-up contributions under Code section 414(v) and whether any contributions made by any participant qualifies as a catch-up contribution; monitoring for maximum contribution limits under Code section 415; monitoring for deduction limits under Code section 404; top heavy testing under Code section 416, including determination of key employees and calculation of required minimum top-heavy benefits or contribution; and Calculation of vesting of employer contributions.
2.2.2. If elected by you, we will prepare the annual returns and relevant attachments for your signature, as Plan Administrator, as appropriate. If the Plan has 100 or more participants at the beginning of the initial Plan year or 120 or more on the first day of subsequent years, (or is otherwise subject to ERISA’s requirement to have audited financial statements), you shall be responsible for retaining a certified public accountant to audit the Plan and provide the required audited financial statements to the Plan on a timely basis for filing with the Annual Report. In addition, if more than 5% of the plan assets are not qualifying assets as defined in Department of Labor (“DOL”) Regulations, The Plan will be required to be audited or to obtain an additional fiduciary bond in an amount equal to 100% of the Plan’s non-qualified assets. You shall be responsible for locating and retaining the auditor and/or obtaining the bond. You shall be responsible for signing and filing these forms with the appropriate government agencies on a timely basis.
2.5. ERISA Section 3(16)(A) Fiduciary Services.
2.5.1. You may elect for HSR to provide certain services to your Plan in the capacity of an ERISA fiduciary. In the absence of such an election, all services provided under this Service Schedule will be provided by HSR in a non-fiduciary, ministerial capacity.
2.5.2. If ERISA Section 3(16)(A) services are elected, HSR will acknowledge its fiduciary status to the Plan with respect to the performance of the following services: Review, sign and file all required government filings (form 5500 and if required form 8955-SSA), authorize and approve the payment of in-service and terminated participant distributions, provide all appropriate notices to active participants including but not limited to; 404a-5, summary of material modifications, summary annual reports, Safe Harbor Notices, automatic enrollment notices. Provide all appropriate notices to terminated participants including, but not limited to summary of material modification, summary annual report, provide appropriate forms and disclosures for participants as noted above except for distribution of enrollment materials for new entrants, review annually the limit for the fidelity bonds and insure that the appropriate limit is maintained.
3. Plan Recordkeeping Services.
3.1. If you have elected to receive plan recordkeeping services, we will maintain and provide daily updated Plan-level and participant-level account statements.
3.2. You may elect for website access to be provided for Plan participants to accommodate daily trading of accounts and for transfer of funds, as well as reallocation of future contributions.
3.3. You may elect our provision of distribution processing services and reporting (including lump sums, installments, in-service withdrawals, partial distributions and annuities if applicable).
3.4. You may elect our provision of loan processing support and modeling preparation and mailing of loan check, promissory note, and payroll deduction authorizations and the preparation and delivery of delinquent, pending default, suspension, and default notices to participants.
3.5. If elected by you, we will support Qualified Domestic Relations Order (“QDRO”) Processing and Reporting
3.6. If elected by you, we will support required minimum distribution (“RMD”) processing and will pay RMDs to participants and beneficiaries.
4. Compensation or Fees to be received by HSR in Connection with TPA Services and Recordkeeping Services.
The compensation or fees to be received by HSR in connection with the provision of TPA Services and Recordkeeping Services is set forth on your Service Order. Our direct compensation and any indirect compensation that we receive are separately identified in the manner required under the U.S. Department of Labor’s fee disclosure regulations under ERISA section 408(b)(2). Billed fees, if any, are invoiced on a quarterly basis. Payment is due within 30 days, otherwise a late fee of 1.5% per month will apply. If payment of billed fees is not received by HS within sixty (60) days of the invoice date, HSR shall recover payment from any available Plan forfeitures, and then as necessary, by deducting such charges against the respective accounts of all Participants on a per capita basis. HSR reserves the right to pursue collection and related attorney fees. In addition, HSR will also have all of the rights described in Suspension of Services section of this Service Schedule.
5. Special Provisions Applicable to Distributions, Hardship Withdrawals and Participant Loans.
5.1. Distributions.
5.1.1. Distributions shall be initiated via the web portal, or in writing to HSR. In the event that distributions are not initiated via the web portal, you will be responsible for notifying HSR in writing when distributions are to be made. HSR will process participant distribution requests, prepare the necessary forms for signature, and generate necessary documents for the distribution. You will be responsible for obtaining execution of such distribution forms and documents.
5.1.2. In the event of a request for distribution for a beneficiary, it will be your responsibility and/or that of the Plan trustees to approve and direct that HSR make the distribution to the appropriate beneficiary.
5.2. Hardship Withdrawal Services. If the Plan provides for hardship withdrawals, you may elect for HSR to process participant hardship withdrawal requests, and assist you in applying the terms of the Plan to determine whether and to what extent a participant is entitled to a hardship withdrawal under the terms of the Plan under the circumstances, provided that you shall at all times be solely and exclusively responsible for making the final determination of whether and to what extent a participant may be entitled to a hardship withdrawal under the terms of the Plan.
5.3. Participant Loan Services. If the Plan provides for loans, you may elect for HSR to assist in the processing of requests for participant loans as may be allowed under the terms of the Plan, including preparation of amortization and repayment schedules, calculation of maximum loan amounts, and preparation of forms and paperwork necessary in connection with the Plan loans, provided that you will be responsible for making the final determination of whether and to what extent a participant may be entitled to a loan under the terms of the Plan.
6. LIMITATION ON HSR SERVICES.
6.1 HSR Does Not Provide Investment Advice. HSR does not and will not provide investment advice, for a fee or otherwise, to any person including you, the Plan, or the Plan’s participants and beneficiaries.
6.2 Control over Plan Assets, or Discretionary Authority or Control over Administration of the Plan. Unless and except to the extent that you have elected for HSR to provide ERISA Section 3(16)(A) services, in which event HSR will serve as an ERISA fiduciary to the Plan for that limited purpose, you or third parties appointed by you have sole discretionary authority and control over the administration of the Plan, and exclusive control over the investment of the assets of the Plan. You acknowledge that HSR and its employees are NOT fiduciaries of the Plan and Trust unless and except to the extent HSR’s Section 3(16)(A) services have been elected.
6.3 HSR Does Not Provide Legal Advice. HSR is not a law firm, and does not provide legal advice. If legal advice is required, you should consult with an attorney experienced in employee benefit plan matters regarding any questions or concerns that you may have relative to the Plan.
7. THE PLAN SPONSOR RESPONSIBILITIES
7.1 Obligation to Provide Timely Information. You shall provide HSR with requested information on a timely basis in accordance with HSR's directions, and you will be responsible for ensuring that the provided information is accurate and complete. HSR will rely exclusively on information provided by you or your advisors, whether oral or in writing, and will have no responsibility to independently verify the accuracy of that information. You acknowledge that inaccurate information and/or late information could result in penalties and possibly Plan disqualification. HSR assumes no responsibility for, and shall not have any liability for, any consequences that result from HSR’s inability to complete its work in the ordinary course of its business due to a failure by you or your designees to provide timely information to HSR.
7.2 Obligation to Make Timely Contributions to Plan. You shall be solely responsible for making sure that funds are actually contributed to the Plan’s trust when required for tax deductibility and to comply with ERISA and DOL Regulations.
7.3 Obligation to Timely File Required Government Reports. Based on your service elections, HSR shall prepare certain government reports. You shall be responsible for (i) the accuracy of the government reports' content and (ii) the timely filing of the government reports with the appropriate agency. You acknowledge that failure to timely file required government reports may result in penalties which shall be your sole responsibility if assessed.
7.4 Obligation to Distribute Required Information to Plan Participants and Beneficiaries. You shall be responsible for distributing information to participants, including notices, elections and reports required by law.
7.5 Obligation to Issue Form 1099R in Connection with Plan Distributions. For pooled investments, outside broker accounts or other certain situations where participant detail is not maintained by HSR, you acknowledge that HSR does not customarily prepare the end of year tax forms required by law when a participant receives a distribution from the Plan (i.e., Form 1099R) nor the forms necessary to report and pay taxes withheld from the distributions (i.e., Form 945 and applicable state forms). If you would like these forms, you must give HSR written notice and HSR must agree to provide them at their option.
7.6 Obligation to Notify HSR of Existence of Other Plans and Companies. The Plan’s operation and tax qualification is affected by other plans sponsored by you, your affiliates, successors, assigns, or by other companies that share your principals, directors or officers (whether currently active or terminated and whether or not HSR administered the plan). You are responsible for informing HSR of the existence of such other plans or companies and of notifying HSR in writing when there is a change in this information or in your tax filing status (e.g., a change from S corporation to C corporation status, a change to an LLC, etc.).
7.7 Obligation to Make Discretionary Decisions Regarding Plan Administration. Unless you have elected for HSR to serve as the Plan’s Section 3(16)(A) administrator, you are responsible for all discretionary decisions relating to the Plan, including the interpretation of plan document provisions, the determination of eligible employees and proper vesting of their accounts, the evaluation of claims made by participants for plan benefits, the investment of plan assets, distribution of plan benefits and the payment of service providers for the Plan.
7.8 Obligation to Obtain Fidelity Bond. ERISA §412 requires that, with certain exceptions, every fiduciary of an employee benefit plan and every person who handles funds or other property of a plan shall be bonded in accordance with the provisions of ERISA §412. You are responsible for obtaining the bond required by ERISA §412.
8. TERMINATION OF SERVICES
8.1 Termination of Services Generally. Services may be terminated by either party upon 60 days written notice, or on such shorter notice as the parties may agree in writing. Notice shall be deemed effective as of the date the written notice of termination is deposited in the United States Mail, or on such date that the party giving notice of termination delivers the notice electronically (for example, by e-mail) using such means as the parties have used to communicate in writing during the period that this Service Schedule has been in effect.
8.2 Suspension of Services for Non-Payment Default. In the event of Non-Payment Default, HSR may immediately suspend all Services contemplated in this Service Schedule. HSR will send written notice to you of this suspension of service. You will have 10 business days from the date of the Non-Payment Default Notice to cure such default, and failure to so cure will give HSR an immediate right to terminate this Service Schedule effective as of any date retroactive to the date of the default. During the time of suspended services and for so long as you are in Non-Payment Default, you agree and understand that you are solely responsible for any and all services previously provided by HSR. You understand that your failure to meet any and all Plan compliance obligations whether by furnishing services directly, through engaging the services of another Third-Party Administrator, or by any other means, may create significant issues with the Plan. You agree to indemnify and hold HSR harmless for any and all issues, penalties, judgments, notices, audits or any other issues relating to or arising from suspension of service pursuant to this paragraph.
9. MISCELLANEOUS
9.1 Assignment. This Service Schedule shall be binding upon and inure to the benefit of the parties and their respective heirs, successors and permitted assigns. You may not assign its rights or delegate its duties under this Service Schedule either in whole or in part without the prior written consent of HSR. Any attempted assignment or delegation without such consent will be void.
10. EXECUTION
You will have accepted this Service Schedule and be bound by its terms on the date you elect any of the TPA Services or Recordkeeping Services.
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