34 Tex. Admin. Code § 87.19 - Reporting and Recordkeeping by Prior Plan Vendors
(a) Definition of current market value. In
this section, the term "current market value" has the following meanings.
(1) For an investment in a qualified
investment product offered by a bank, credit union, or savings and loan
association, current market value means the amount of deferrals plus investment
income minus withdrawals minus applicable fees.
(2) For an investment in a mutual fund,
current market value means the price of each share at the end of the calendar
quarter multiplied by the number of shares purchased with deferrals and
investment income minus applicable fees.
(3) For an investment in a term life
insurance product, the current market value is usually zero.
(4) For an investment in a life insurance
product, current market value means the cash value of the product minus
applicable fees.
(5) For an
investment in an annuity, current market value equals the amount of deferrals
plus investment income minus payouts minus applicable fees. For annuitized
accounts, current market value means the present value of all remaining
payments, taking into consideration the prevailing statutory interest rates
pursuant to the Texas Insurance Code, Article 3.28.
(b) Reports to participants or beneficiaries.
(1) Generally.
(A) A prior plan vendor shall issue a report
after the end of each calendar quarter to each participant or beneficiary whose
deferrals and investment income are invested in a qualified investment product
offered by the prior plan vendor, except if the investment is in a product that
is annuitized.
(B) The report shall
cover all transactions during a calendar quarter.
(C) A prior plan vendor shall ensure that the
participant or beneficiary receives the report no later than the 45th day after
the end of each calendar quarter.
(D) The report must show for each qualified
investment product:
(i) the amount of the
participant's or beneficiary's deferrals and investment income in the product,
including transfers;
(ii) the
amount of applied product costs or surrender charges;
(iii) the date and amount of withdrawals
during the reporting period; and
(iv) the current market value of the
participant's or beneficiary's deferrals and investment income.
(2) Investments in life
insurance products. The requirements of the preceding paragraph apply to
investments of deferrals and investment income in life insurance products
except:
(A) the report is due at least once
each calendar year instead of after each calendar quarter; and
(B) the period covered by the report may be
either the calendar year or the product year.
(3) Final reports. If a participant or
beneficiary receives a lump-sum distribution, the prior plan vendor or TPA from
whom the lump-sum distribution is made shall issue a final report to the
participant or beneficiary containing the information required in paragraph (1)
of this subsection. The report must accompany the lump-sum
distribution.
(c)
Capital category reports. Once each quarter, or more frequently if appropriate,
a prior plan vendor which is a bank or savings and loan association shall
report to the plan administrator that financial information regarding capital
categories and risk-based ratios described in §
87.7(i) and (j)
of this title (relating to prior plan vendor participation).
(d) Reports and remittance to the plan
administrator.
(1) Frequency and coverage of
reports and payment of fees. Every vendor in the prior plan that has
participant or beneficiary deferrals, and/or investment income, must ensure
that the plan administrator receives a report no later than the 15th day after
the end of each calendar quarter. The fiscal year end report must include
transactions for July and August. Every prior plan vendor must also remit any
fees assessed to it by the plan administrator, no later than the 15th day after
the end of each quarter. Every vendor must ensure that the plan administrator
receives a special report at the end of the fiscal year (August 31st), no later
than fifteen days past fiscal year end - September 15th, in addition to the
normal quarterly reporting schedule. The report must be in the format specified
in this subsection and must cover all transactions during the calendar
quarter.
(2) Content of reports.
For each participant or beneficiary whose deferrals and investment income are
invested in a qualified investment product offered by the vendor, the report
required by this subsection must contain but is not limited to:
(A) the participant's or beneficiary's name,
agency code and social security number(s);
(B) a list of the qualified investment
products in which the participant's or beneficiary's deferrals and investment
income have been invested;
(C) the
amount of monthly deferrals for the reporting period separated and listed per
month;
(D) the interest and other
income earned or lost during the reporting period through the investment of the
deferrals and investment income;
(E) the amount of federal income tax withheld
during the reporting period;
(F)
the current market value of each participant's or beneficiary's deferrals and
investment income in each qualified investment product, including, if
appropriate, the number of shares and per share market value;
(G) the amount of fees that the prior plan
vendor charged during the reporting period;
(H) the amount transferred in and out as a
result of a change of product within a company, identified separately by each
internal transfer;
(I) the amount
of each plan administrator directed transfer in or out; and
(J) the amount of each separate net
distribution to the participant or beneficiaries, except that multiple payments
that fall on the same day should be combined into one account for quarterly
reporting purposes.
(K) a report
specifying how the fees assessed to the prior plan vendor by the plan
administrator were calculated and the asset base on which the fee was
based.
(3) Format of
reports.
(A) All reports must be in the
format prescribed by the plan administrator and follow the DCP quarterly
reporting specifications on a:
(i) 5 1/4 or 3
1/2 inch high quality PC diskette;
(ii) manual form; or
(iii) electronic file transfer - use of file
transfer protocol (FTP), via the Internet or as an attachment to an electronic
mail (E-mail).
(B) Only
prior plan vendors with less than fifty participants are eligible to report on
a manual form.
(C) Before a prior
plan vendor may use a medium other than a manual form to file a quarterly
report with the plan administrator, the vendor must submit a written request
along with an electronic transfer file, or diskette to the plan administrator.
The ERS must approve and make arrangements with the prior plan vendor prior to
testing the electronic file transfer. The electronic transfer file, or diskette
must be in the format and contain the information prescribed by the DCP
reporting specifications and contain the information that the plan
administrator requires including the items listed in paragraph (d)(2)(A) - (J)
of this subsection. Failure to submit data in the specified format will result
in the return of the media without processing. If the plan administrator
determines that the electronic transfer file or diskette is inadequate, the
plan administrator shall ensure that the number of participants whose deferrals
and investment income are invested at any given time in the vendor's qualified
investment products does not exceed 49.
(D) The product types must be defined and
coded as prescribed by the plan administrator and as in the DCP quarterly
reporting specifications.
(E) If a
participant or beneficiary has invested deferrals and investment income in two
or more qualified investment products offered by the same prior plan vendor and
the products are of the same type, then the prior plan vendor must report a
cumulative total of those deferrals and investment income.
(4) A prior plan vendor that fails to submit
to the plan administrator any required report with an authorized signature or
the assessed fee will be subject to formal reprimand. After two formal
reprimands, a vendor may be expelled from the plan and subject to further
liability as applicable.
(5) Late
reports and/or fee payment.
(A) A report or
fees are delinquent if the plan administrator receives the report and/or fees
after the due date.
(B) A report or
fees that are received before the due date but which are returned to the vendor
for completion or correction are delinquent if the plan administrator does not
receive the completed or corrected version of the report or correct amount of
fees within 10 days after the original due date.
(e) Recordkeeping. A prior plan
vendor shall retain records concerning investments in each qualified investment
product by each participant. The records must be retained until the expiration
of the second year after the prior plan vendor has distributed all the
participant's deferrals and investment income.
(f) Quarterly reconciliation. In accordance
with §
87.3(b)(3)(H) of
this title (relating to Participation by State Agencies), a benefits
coordinator may be responsible for balancing participant and beneficiary
records and reconciling those records with the data provided by qualified
vendors and the plan administrator. Prior plan vendors shall assist the plan
administrator and state agencies with correcting and explaining any
discrepancies. Failure to assist the plan administrator and state agencies with
this reconciliation will be considered a rules violation, and the plan
administrator may take appropriate action under §
87.21 of this title (relating to
Remedies).
Notes
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