Products June 23, 2014

Small Plans Have More Opportunities for 3(16) Service

June 23, 2014 (PLANSPONSOR.com) - Transamerica offers the Retirement Plan Exchange, designed to reduce administrative burdens on plan sponsors.
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It covers a wide range of tasks, including developing an investment policy statement, selecting and monitoring investments, filing Form 5500 with the Department of Labor and other regulatory reports, non-discrimination testing, contribution limits tracking, distributions and hardship requests. Additionally, the Exchange automatically enrolls participants in the plan at a 6% contribution rate with automatic escalations of 2% a year up to 10%.

Transamerica serves as recordkeeper for the Retirement Plan Exchange, while 3(21) and 3(38) fiduciary and 3(16) administrator services are handled by independent firms.

“In traditional arrangements, an employer establishes its own plan and assumes primary responsibility for the management and administration of the plan,” says Jim Kais, senior vice president, defined benefit and special markets sales at Transamerica Retirement Solutions. “With the Retirement Plan Exchange, participating employers receive help developing an investment policy statement and lineup, assistance with monitoring of investments, as well as ongoing reporting support. Outside of the Retirement Plan Exchange, these duties fall directly on the employer.”

More than one-quarter of small businesses do not offer a 401(k) or other defined contribution plan to their employees, Transamerica notes. “Expanding retirement plan coverage is an important step in improving American workers’ ability to retire securely, and the benefits of the Retirement Plan Exchange can help,” Kais says.
Compliance June 23, 2014

SSA Updates Processing for Same-Gender Couples

June 23, 2014 (PLANSPONSOR.com) – The Social Security Administration (SSA) has published new instructions that allow the agency to process more claims in which entitlement or eligibility is affected by a same-gender relationship.
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These updated instructions come in response to the U.S. Supreme Court’s 2013 decision in United States v. Windsor, which found Section 3 of the Defense of Marriage Act (DOMA) unconstitutional and expanded the definition of the term spouse. As result of the court ruling, the SSA is no longer prevented from recognizing same-gender marriages to determine entitlement or payment amount.

The updates to the processing instructions cover the topics of:

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  • Aged spouses;
  • Lump sum death payments;
  • Surviving spouses;
  • Supplemental Security Income (SSI);
  • Determining marital status for Title II and Medicare Benefits;
  • Dates and states permitted or recognized same-gender marriage; and
  • Non-marital legal relationships such as civil unions and domestic partnerships.

These updates allow the SSA to recognize some non-marital legal relationships as marriages for determining entitlement to benefits. These instructions also allow the SSA to begin processing many claims in states that do not recognize same-gender marriages or non-marital legal relationships. According to a statement from the SSA, the agency has consulted with the Department of Justice and determined that the Social Security Act requires the agency to follow state law in Social Security cases. The new policy also addresses Supplemental Security Income claims based on same-gender relationships.

“As with previous same-sex marriage policies, we worked closely with the Department of Justice,” says Carolyn W. Colvin, Acting Commissioner of Social Security, based in Washington, D.C. “We are bound by the law within the Social Security Act, and we have to respect state laws. We remain committed to treating all Americans fairly, with dignity, and respect.”

More information about this topic, including links to the revised instructions, as well as a fact sheet and questions-and-answers sheet, can be found here.

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