Required Level of Detail on pre and post-January 1, 1989 TSA accruals

[Guest Carol Smith]

Hello, my name is Carol Smith and I am new to this board. I welcome learning much about TSAs! I am currently working with an insurer who plans to support TSA products on new administrative software that needs some enhancements. They will, of course, also be required to handle rollovers into TSAs, and take on existing plans from other administration carriers, so the issue of the important need to handle pre-January 1, 1989 accruals will be required.

The question has been raised around the issue of hardships. In particular, we understand that the employee can access for hardship:

-- pre-Jan 1989 salary reduction contributions

-- pre-Jan 1989 earnings on associated salary reduction contributions

-- Jan-1989-to-current salary reductions contributions

but NOT Jan-1989-to-current earnings on associated salary reduction contributions

The important recordkeeping question is this: is it possible to prorate the earnings proportionally against the total earnings only when it is needed? Or is it necessary to actually separate these pre-and-post Jan 1989 contributions among ACTUAL specific investment choices and determine REAL associated earnings with pre and post monies? The results can be very different depending on the answer. For example, if I had invested all post Jan, 1989 contributions into a recently disastrous technology fund and all pre-Jan 1989 contributions in a well performing equity-income fund, the earnings available number would be different whether exact or prorated.....Any thoughts on this topic would be welcomed!

Carol Smith