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how "material" for an SMM?


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I have to amend a plan because it was written to provide for monthly loan repayments, but the client now tells us that their payroll cycle is weekly and they (wisely) want to make all loans be paid through payroll deduction, one paycheck = one repayment.

How "material" is this change? The plan is a Datair prototype, where the Loan Procedure document is referenced to be part of the master document. Not that the employer is trying to hide anything here (that I know of), but if they can avoid confusing the participants with an additional notice, that would be nice. Is this a small enough issue that it doesn't warrant notification? Thanks.

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I would think this is more an administrative process than a change to the benefits available. I wouldn't use SMM for this notice. Yes fix the plan language. If it were me, I would just add notice to quarterly stmts or send something out with paychecks.

JanetM CPA, MBA

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Is the SMM modifying or indicating changes to the SPD? In other words, if the item doesn't appear in the SPD, there is no need for an SMM.

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JanetM, isn't what you're suggesting essentially the same as an SMM? SMM's can be given out some time after the actual change, so handing it out with the next paycheck or statement - which is a good idea, not giving the participant's another notice at a separate time - seems to be the same thing.

BXO - the Loan Procedure is part of the SPD, so I see your point. That's an option that I don't usually use (but I didn't write this document!), so maybe we made it more difficult on ourselves. But I don't think that really matters, since the language of the Loan Procedure is referenced in the SPD (when it is a separate document) and the plan document itself.

Bottom line: I gave them an SMM and told them to hand it out at a convenient time in the next couple of weeks. So much for trying to simplify things... :rolleyes:

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It is my understanding that process changes are not material changes that require SMM. Fund changes, payroll cycle changes other process changes are administrative. SMM reflects formal amendment to the plan and not simple process change.

JanetM CPA, MBA

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JanetM, isn't what you're suggesting essentially the same as an SMM? handing it out with the next paycheck or statement seems to be the same thing.

Just to clarify, I think what Janet was originally proposing was a more simple communication, which didn't have to meet the more rigid requirements of an SMM. (I personally pictured two sentences, "Loan payments on new loans will be weekly instead of monthly. This does not effect existing loans.")

Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

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