Products April 10, 2008

Principal Touts New Tool for 403b Plans

April 9, 2008 (PLANSPONSOR.com) - The Principal Financial Group is rolling out a new tool that walks nonprofit employers and their financial professionals through the decisionmaking process.
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Using model scenarios, the tool outlines the actions needed for three 403(b) plan structures.   According to a press release, the new interactive tool helps plan sponsors and financial professionals understand the new regulations with plain-language explanations, identify the structure of their 403(b) plan by reviewing criteria for three model plans, and learn what steps they need to take for their model.  

“Sponsors now have to think about their 403(b) plans in a whole new light,” said Aaron Friedman, national non-profit practice leader, The Principal. “The new rules require that 403(b) plans be run more like 401(k) plans. That’s a major change in and of itself.”

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According to the announcement, the new interactive tool helps plan sponsors and financial professionals:

  • Understand the new regulations with plain-language explanations
  • Identify the structure of their 403(b) plan by reviewing criteria for three model plans
  • Learn what steps they need to take for their model
  • Fulfill their compliance obligations and meet IRS deadlines

The tool is available at www.principal.com/403btool

Compliance April 9, 2008

Employer Fined for Lying on Form 5500

April 9, 2008 (PLANSPONSOR.com) - A Charlotte construction contractor has been hit with $153,000 in penalties and fines and sentenced to one year of federal probation after pleading guilty to filing a false Form 5500.
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A news release said Jeffrey R. Thomas, 56, President of Thomas Construction Services, Inc., received the fine and the term of probation during a hearing before by U.S. District Judge Martin Reidinger of the U.S. District Court for the Western District of North Carolina.

Thomas entered a guilty plea to the charge in December 2007, the announcement said.

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According to a court documents, Thomas admitted to preparing and submitting the falsified Form 5500 for the fiscal year ending June 30, 2002, for the Thomas Construction Services, Inc., Profit Sharing Plan, for which Thomas served as Trustee.

The court documents said Thomas also admitted that, on or about March 11, 2002, he instructed custodian New England Life Insurance Company to remove funds from the plan and to issue a check for $200,000 to the trustees.

About a week later, Thomas opened an RBC Centura Bank account in the name of the plan and, on various occasions, though he was a “party-in-interest,” he withdrew funds from the plan assets and used them to invest in other business interests. The announcement said the plan did not lose money.  

The false statement on the Form 5500 concerned the answer to Part II, question 4, part d, which read, “Did the plan engage in any nonexempt transaction with any party-in-interest?”

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