Notice Regarding Periodic Benefit Statement

[Guest Jill B]

Does anybody have a template or example to help prepare this new required statement for multiple sources?

Thanks!

[Guest Jill B]

This is what I came up with based on one situation where a plan's participants have brokerage accounts.

Notice of Multiple Sources

Regarding Periodic Benefit Statement Information

For the

____________(plan name)__________________

This notice satisfies the DOL requirement under PPA ‘06 to provide information to you, the plan participant regarding multiple documents.

Because your plan assets are held in a brokerage account, the brokerage account will provide you with monthly statements showing:

1. Your total balance, and

2. The value of assets allocated to your account.

Your plan’s TPA will provide the following information quarterly:

1. Your vested account balance (updated annually),

2. A breakdown of the value of your account based on contribution types,

3. An explanation of permitted disparity rules used in your profit sharing allocation,

4. Any plan restriction on investment direction,

5. Diversification information,

6. Reference to the DOL website for additional investment information.

This information will be provided to you no later than 45 days following the end of each calendar quarter.

[Bird]

As a "TPA" I don't like the idea of saying "your TPA will provide..." We assist Plan Administrators with their duties but don't do anything directly. This is what we use (permitted disparity language will vary by plan and is omitted if not applicable):

XYZ 401(K) PLAN

SUPPLEMENTAL BENEFITS STATEMENT

The Pension Protection Act of 2006 contains new requirements for information to be provided in your plan’s participant statements. Some of the new requirements are covered in the statements you receive from XYZ Investments, Inc. or other brokerage firms. The following information is not included on the brokerage account statements and is provided to you as a supplement to complete the reporting requirements.

Investment principles and Department of Labor web site

To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk.

It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals.

For more information on individual investing and diversification, visit the Department of Labor's website at http://www.dol.gov/ebsa/investing.html.

Explanation of permitted disparity

Your plan’s allocation formula for non-elective contributions uses a method known as permitted disparity. The following describes how contributions are allocated.

Non-Elective Contributions

The Employer may also make other discretionary contributions to the Plan. These contributions are called Non-Elective Contributions. In any Plan Year in which Non-Elective Contributions are made and in which you are an eligible Participant, an allocation will be made to your Non-Elective Contribution Account in the following manner: First, an amount up to 5.4% of your Excess Compensation, if any, will be allocated to your Non-Elective Contribution Account; next, after an allocation has been made to all Participants who have Excess Compensation, a portion of the remainder of the contribution will be allocated to your Non-Elective Contribution Account in the ratio that your Compensation bears to the total Compensation of all eligible Participants.

Non-Elective Contributions

Your Employer may make contributions to the Plan which are called Non-Elective Contributions. These contributions are totally discretionary, including the discretion to forego a contribution for one or more Plan Years. In any Plan Year in which a Non-Elective Contribution is made and in which you are eligible to receive a share of that contribution, an amount will be allocated to your Non-Elective Contribution Account in the following manner:

Step 1: First, an amount will be allocated to your Account in the ratio that your Compensation bears to the total Compensation of all eligible Participants, but the maximum amount of this allocation will not exceed 3% of Compensation.

Step 2: Second, an amount will be allocated to your Account in the ratio that your Excess Compensation (if any) bears to the total Excess Compensation of all eligible Participants, up to a maximum allocation of 3% of your Excess Compensation.

Step 3: Third, an amount will be allocated to your Account in the ratio that your Compensation and Excess Compensation bears to the total Compensation and Excess Compensation of all eligible Participants, up to a maximum amount allocation of 2.4% of your Compensation plus Excess Compensation.

Step 4: Finally, the balance of the contribution will be allocated to your Account in the ratio that your Compensation bears to the total Compensation of all eligible Participants. This means that the amount allocated under this step to each eligible Participant's Account will, as a percentage of Compensation, be the same.

For Non-Elective Contribution purposes, your Compensation is the total remuneration you receive from us during the Plan Year, excluding any amount in excess of the annual dollar limit. The current annual dollar limit is $245,000, but this dollar amount may be changed in future years to reflect the cost of living as permitted under federal regulations or to reflect changes in the law. Your Compensation for Non-Elective Contribution purposes will also exclude any amount you receive prior to becoming a Participant or while you are a member of an ineligible class of employees.

Your Excess Compensation is the portion of your Compensation that exceeds 81% of the Taxable Wage Base. The Taxable Wage Base is the maximum amount of Compensation which is subject to Social Security withholding based on the Social Security withholding table in effect on the first day of the Plan Year. For the Plan Year beginning in calendar 2009, the Taxable Wage Base is $106,800. The Taxable Wage Base is automatically increased each calendar year for increases in the cost of living as required by federal law.

Please refer to your Summary Plan Description for other information on contributions.

[Guest Jill B]

We do have that information listed as disclosure notes on our participant statemtents. I am understanding that we need an additional notice that is distributed prior to the receipt of the first benefit statment with enrollment materials which indicates where the participant can expect to find certain information regarding their retirement account and when will it be provided.

The notice requirement is satisfied with just an initial notice. Therefore, I think this is something different.

I will take out the TPA reference for the valid reason you provide. Thank you for that!!!!