Required amendments supersede or expand on the text of your plan document and reflect changes in the law governing the plan.

These required amendments generally affect the Basic Document. (The Basic Document is the “umbrella” portion of the plan document upon which the Plan’s Adoption Agreement is based.) TSC is a sponsor of the Basic Document.

Our Basic Document was approved by the IRS in 2006. Since then several required amendments have been adopted. The most recent are the 2009 Interim Plan amendment and the 2009 Core amendments.  These Amendments reflect certain provisions of the Pension Protection Act of 2006 (PPA ‘06), the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART), the Emergency Economic Stabilization Act of 2008 (EESA), and the Workers, Retiree, and the Employer Recovery Act of 2008 (WRERA). For a summary of the changes please go to
https://secure.tsc401k.com/forms/2009%20Amendments%20Summary.pdf

For your convenience, these amendments are posted on your secure plan access site for you to view at any time. (Simply log on to the TSC Secure Plan Access Website go to “Forms and Reports” and scroll down to the document section.) You will find the 2009 Interim amendment in the Amendment section.  The Core amendments are incorporated into the Basic Document and the Trust.

In addition, TSC is in the process of mailing paper copies of these amendments to our clients. (Note:If you  received the EGTRRA restatement of your plan after September 2009, these amendments were already incorporated into the plan document binder you received.)

Will there be another required amendment within the next 2 years? In all probability, yes.  As always, you can be assured that we at TSC will continue to monitor the governing laws for any changes and take the appropriate action to keep your plan document in compliance.

Deposit Timing

In January 2010, the DOL issued a final regulation to protect employee contributions deposited to small pension plans with fewer than 100 participants by providing a safe harbor period of seven business days following receipt or withholding by employers.  While the safe harbor only applies to small plans, we believe it likely that enforcement officials will apply a similar standard for large plans (those with more than 100 participants).

The U.S. Department of Labor is actively enforcing these regulations and is sometimes bringing criminal charges against Plan Sponsors who do not make deposits timely.  The DOL emphasizes that for large plans, the 15-business-day rule is an outside limit and not “safe harbor”.  Deposits must be made as soon as possible after they are withheld.  DOL representatives have stated that a rule of thumb is if you can make your payroll tax deposits within a few days, you should make the deferral deposits within a few days.  We have been told that the question that a DOL auditor will ask is: Why not make the deposit the day the paycheck is issued?  We take this to mean that if you have weekly payrolls you should be depositing the deferrals and loan payments weekly; if you have semi-monthly payrolls you should be depositing the deferrals and loan payments semi-monthly.

A direct question on this subject appears on the Form 5500, the annual reporting form for qualified Plans.  Please review your deposit timing and procedures to ensure you are meeting the DOL requirements.

SAS 70 is an acronym for Statement on Auditing Standard 70; it was developed and is maintained by the AICPA (American Institute of Certified Public Accountants). Specifically, SAS 70 is a Report on the Processing of Transactions by Service Organizations where professional standards are set up for a service auditor that audits and assesses internal controls of a service organization. At the end of the audit, the service auditor issues an important report called the "Service Auditor’s Report". 

The SAS 70 report shows that the Service Organization has been thoroughly reviewed and deemed to have satisfactory controls and safeguards either when hosting specific information or processing information such as data belonging to user organizations. Furthermore the Report provides;

• An independent assessment
• Demonstrates a sound control environment
• Quality Assurance
• Minimizes 5500 Audit fees
• Provides service organization transparency
• Builds trust with the user organization

How does TSC’s SAS 70 benefit you, the Plan Sponsor?  If your plan is subject to filing as a large plan, check with your auditor to see whether a reduction of their fees is applicable. 
           
You can find TSC’s SAS 70 report in the Admin Resources tab of the Secure Site.

Business Continuity Planning (BCP) is the creation of a practiced logistical plan for how an organization will recover and restore interrupted critical functions within a predetermined time after local, regional or national disasters such as: fires, earthquakes and pandemic illnesses. 
           
A completed BCP cycle results in a formal printed manual available for reference before, during, and after disruptions have occurred. Its purpose is to reduce adverse stakeholder impacts determined by both the disruption's scope (who and what it affects) and duration (how severe, implications last for hours, months etc).

TSC is proud of its BCP and the piece of mind it provides our clients. Under most disaster scenarios, TSC has procedures to operate near capacity just 48 hours following the disaster.  We also have extensive recovery systems in place to preserve the data of all the retirement plans under our service.  Your plan data and services are protected in the event of a regional or natural disaster.  So, while you are worrying about your own business in that situation, you will not need to worry about your retirement plan.

While Health Care reform seems to be dominating the time of a vast majority of our governmental leaders, occasionally we hear of other proposed legislation that has merit.  Late last year three senators; Jeff Bingaman (D-New Mexico), Johnny Isakson (R-Georgia) and Herb Kohl (D-Wisconsin) introduced legislation that would require 401(k) plan sponsors to inform plan participants of the “projected monthly income” they could expect at retirement, based on their current account balance. The proposed bill is called the Lifetime Income Disclosure Act. I am usually not one to support additional government-mandated disclosures, but this could be an exception.  In 1989 Congress mandated annual Social Security statements, which provide an estimated benefit at retirement and they have proven to be very useful to workers in preparing for retirement.

Today, most 401(k) participants know how much they contribute but they don’t know how much retirement income their plan will produce or how long their nest egg will last.  If we want our 401(k) plans to be successful for all participants we must encourage them to focus on the income their 401(k) accounts will generate and not so much on current account balances.  Logic tells me that you are much better off knowing how much income to expect if you keep saving until retirement.  American workers need a complete snapshot of their projected income at retirement.  You need to be able to see the target if you are to have a chance of hitting it.

At TSC, we are ahead of the game – and you are too!  We’ve been providing estimated retirement benefits to our clients since 2006.  The TSC 401(k) Health Check™ reports on participation rates and benefit levels.  It also includes participant statements so that participants in the plan are able to gauge the level of benefit their current savings will provide and gives them the opportunity to improve it.

It is important to me that TSC be a leader and good steward of the retirement plan industry.  I know first hand the fear people have as they near retirement of not having enough savings to sustain their retirement goals.  In addition to providing high quality administration services to plan sponsors, it is our sincere desire to help all plan participants achieve a successful retirement.  We will remain committed to this goal and be innovative in our solutions to achieve them.

We at TSC believe the most important aspect of any retirement plan is to put the participants’ interest first.  Protecting the participants’ benefit is the number one responsibility of a Plan Fiduciary.  The TSC 401(k) Health™ Check was designed with this in mind and we are proud to announce the TSC 401(k) Health Check™ is in it’s 4th year.

The TSC 401(k) Health Check™ provides the Plan Sponsor and the employee participant with the tools to determine the adequacy of each participant’s benefit.

A successful retirement plan should be defined as a plan that provides participants with adequate retirement benefits.  This raises two important questions:  What are adequate retirement benefits?  In order for a plan to be successful, how many participants need to meet this retirement goal?

In determining the adequacy of retirement benefits, TSC focuses on a participant’s Income Replacement Ratio.  Leading industry advisors suggest that an adequate Income Replace Ratio, including social security, of 70 to 80 percent of final.  The TSC 401(k) Health Check™ uses 75 percent as the replacement goal for a participant’s Income Replacement Ratio.

The participant’s age, annual compensation, contributions made to the plan and their account balance at the end of the plan year are used to determine what they can expect their annual benefit to be at age 67.  If they are not meeting the 75% income replacement based on their contribution rate or balance in the plan, the TSC 401(k) Health Check™ will show the participant what increase of their contributions is needed in order to meet the 75% income replacement goal.

As a TSC Plan Sponsor, you will receive the TSC 401(k) Health Check™ each year once all testing and the annual reports have been prepared.  If you should have questions regarding the completion of your TSC 401(k) Health Check™ or would like more information about the report in general, please call the TSC Client Relations team at 952-806-4300.

We are happy to announce that, once again, we have made several new additions to our Secure Plan Access website in the past couple of months.  Here are some of the additions and how they will benefit you.

Reports & Forms

In addition to having access to distribution forms, Summary Plan Description (SPD) and applicable participant notices, you are now able to access your EGTRRA Adoption Agreement, Plan Specifications, TSC SAS70, TSC 401(k) Health Check™ and your 2009 Year End Reports (once they are completed).  The Year End Reports are an electronic copy of all the reports you had received by mail.

Admin Resources

The Plan Administration Guide is broken down into subject categories to help you conveniently locate a specific topic as it pertains to the administration of your plan as the plan sponsor.  This tab also has all the previous issues of the TSC Translator, the IRS Limits, Year End Tips, 2009 Amendment Summary and the Retirement Calculator.

Plan Highlights

Your plan features are always available in the Plan Highlights tab.  Some of the features you will find are the plan participation rates, eligibility requirements, vesting schedules and distribution options.  There are many other details available, login to see them all. Please note: The information listed under the Plan Highlights tab is updated each year upon the completion of the year end reports.

Secure FileSEND

Do you have a file that contains sensitive information that you need to deliver to your TSC Retirement Plan Administrator but you don’t feel comfortable using email?  Send this file to us via a secure link on the website www.tsc401k.com.

Please take a couple of minutes to visit our new and improved website at www.tsc401k.com.

On what page of TSC’s SAS 70 is the Business Continuity Plan addressed?

1st correct response to this issue of the Translator Brain Teaser will receive a $25 American Express gift card. Simply click "reply" to this email and send us your answer.

“$5,000 compensation is considered eligible for plan purposes” was the correct answer to the Winter 2009 Translator Trivia Question. Julie Wendinger from Dittrich Specialties had the first correct response. Congratulations!