PPA Vesting Notice Requirement

[BeanCounterBlues]

I'm curious as to what other TPA's are doing that handle only allocated accounts, where the investment company produces account statements. I'm an independent TPA not in the statement production business. Some investment companies are already stating they will not assist w/ the PPA vesting notice requirements even though IMHO programming this information would be relatively simple.

Is it permissible to generate a generic statement to participants at year end that states the vesting provisions of the plan and how to apply them, or does PPA require a customized statement for each participant, stating their particular vested percentage for each money type. Although such a statement would be a redundant repetition of the SPD, the alternative which is to provide a customized statement will prove very costly to the client (in terms of what I would have to charge to recoup the production costs).

Thank you in advance for any help.

[Guest Pensions in Paradise]

I don't understand the problem. The plan is already required to provide an annual benefit statement which shows the participant's vested account balance.

[BeanCounterBlues]

I must be missing the boat. I've been getting notices from investment companies stating they are not going to assist w/ new vested benefit reporting requirements. If it's an old requirement, then why the notifications?

[Bird]

I believe that benefit statements are currently required upon request. PPA says that after 2006, benefit statements are required quarterly for self-directed plans and annually for other DC plans.

PPA permits vesting info to be provided annually, and it can just be a description of how to do the calculation. This and other exceptions are described in PPA...IMO anyone potentially affected by this MUST read the relevant section of PPA (508) and not just rely on summaries. Here's one link to PPA: HR 4 ASPPA link

I haven't heard from investment companies about whether they will or will not attempt to provide the supplemental info; I don't expect them to because in many cases they're just using "regular" brokerage accounts that happen to be part of a plan.

We really don't know at this point whether brokerage statements, issued monthly or quarterly, plus a supplemental statement covering the blah blah that no one cares about, will satisfy the statement requirement. We don't know when the statements must be delivered. (Consider that annual statements, when prepared in conjunction with a tax return on an accrued basis, might not be prepared until 9 1/2 months after the end of the year.) We don't know...a lot. And don't hold your breath for DOL guidance. For now, I think we're going to assume that the brokerage statements themselves satisfy the basic "statement" part of the requirement and will issue some kind of supplemental statement covering the rest of the nonsense. It's one of those things for which there will be "widespread noncompliance" and probably not enforced very carefully. It seems to be a back-burner issue for the DOL but if they don't care I wish they would come out and say so.

[Guest Wolves1962]

So does this mean that all plans that are not 6 year graded or 3 year cliff have to be amended asap?

[BeanCounterBlues]

Replying to Bird - thanks for your help. Wholeheartedly agree w/ the IMO.