FEBRUARY 2007 Pension Plan tip of the month...

401(k) Forms

Important Processing Information

In recent months some important questions have often arisen regarding 401(k) forms:

Using Current Forms:

The first important issue, in order to maintain regulatory compliance, is to make sure all forms are current by printing from the plan sponsor website on an “as needed” basis rather than keeping a supply on hand, or in the case of enrollment forms, ordering new enrollment kits periodically.  This will ensure that all forms contain the most current tax, investment, and other information. This will also ensure that the Service Operation can process forms in the most-timely manner.

Timely Submission:

The second important issue is to be sure that forms are submitted on a timely basis.  It is imperative that enrollment forms are submitted before contributions are remitted to the investment company to avoid having contributions returned.  Please be aware of your plan’s entry dates and plan eligibility.  If your plan has quarterly entry dates, for example: 1/1, 4/1, 7/1 and 10/1, please be sure to be sending forms for these periods.  Remember, you may only allow a participant into the plan during your plan’s entry dates. 

Where to send forms:

What do I do with Beneficiary Forms?

The Employer should keep all beneficiary, change of beneficiary and spousal waiver forms on file.  In the event of a participant’s death, the Plan Administrator will be responsible for completing the beneficiary information.

What forms should be sent directly to the record keeper (investment firm)?

Enrollment forms, Participant Data Change forms, Investment Change forms and Rollover Contribution Election Forms should be sent directly to the record keeper.  Please note that employees most often must make their investment changes using the Internet or an Interactive Voice Response System.

What forms should be sent directly to Paragon?

Unless the process is fully automated, withdrawal forms should be sent directly to us via fax (originals should be kept for your files) for completion and review and then they will be forwarded to the investment carrier.