Chapter 9...
Reports
Reports Generated by Your Plan Administration Software
U.S. Government Forms and Reports
There are two main categories of 401k plan reports that you will be dealing with:
1. Reports generated by your plan administration software, some of which go to plan participants or the investment companies and some of which are for your use and information.
2. Reports that go to the IRS. The 401k FedForms website (www.401kfedforms.com) explains these forms and instructs you on where within your 401k administration software to find requested information.
Actually, not all of the above are reports per se, but for convenience in this chapter we refer to them all as reports.
The following paragraphs give a brief description of the reports and their uses.
Reports Generated by Your Plan Administration Software
To view or print your plan administration software reports, open the Reports window. On the right is an alphabetical list of all the reports. On the left is a list of categories. You can work from either list; if you are working on monthly activities, for example, you probably will find it easier to click on Monthly 401k Activity Reports on the left, to view all the monthly reports together. Then click on the report you wish to see, then on Year and Month (if necessary) in the upper left-hand corner, and choose the month and year you want from the pulldown menus.
Clicking on Print allows you to view the report on the screen if Screen is selected in the main menu window; conversely, the report will print out if Printer is selected on the main menu. Reports displayed on the screen can be sent to your printer by pressing Ctrl P.
You can also view or print out the forms and documents to be distributed to employees, such as the Enrollment Pac, Distribution Pac, Loan Pac, etc. (These are PDF documents you read using Adobe Acrobat Reader. You can download Acrobat Reader from the your plan administration software CD or from www.adobe.com: scroll down to and click on Get Acrobat Reader, then click on Free Adobe Acrobat Reader. Your plan administration software documents are 3.0 and higher compatible.)
The Distribution Pac is used by the participant or beneficiary to indicate his or her choice for distribution of plan assets upon termination of employment, death, or disability. Contains the Special Tax Notice Regarding Plan Payments, which explains about important rollover and other distribution options and certain tax implications of each.
401k Distribution Pac (Over 59 1/2-Plus)
This document is used by employees who are 59 1/2 years of age or older to request a cash distribution from their plan accounts. Includes tax considerations for persons 59 1/2 years old or older and the special tax notice regarding plan payments, including important rollover and other distribution options and certain tax implications of each.
The 401k Hardship Withdrawal Pac contains all the terms and conditions for this form of distribution, plus the step-by-step procedures and relevant forms.
The 401k Loan Pac summarizes the basics about 401k loans, presents the terms and conditions of your plan loans, lists the step-by-step procedures for obtaining a loan, gives loan policy guidelines, and contains the official loan request that the participant completes, including the spousal consent form and promissory note. Also contains the participant loan disclosure statement giving the terms of the loan and the disposition of the loan application.
The 404c Compliance Log is a chronological log of the distribution to employees of relevant 401k information to show that requested information was distributed in a timely manner, in conformance with Internal Revenue Code paragraph 404(c). Any time you, the Plan Administrator, print out an Enrollment Pac, Investment Pac, Loan Pac, Distribution Pac, etc., the software asks whom the information is for and logs the fulfillment of the request.
Asset Liquidation Authorization
This is the form sent by the Plan Administrator to the investment company authorizing liquidation of a participant’s account assets, in whole or in part, for a number of stated reasons (loan, hardship withdrawal, lump-sum distribution, etc.)
The Asset Transfers-In Pac is used by a new employee to roll over 401k assets directly from a former employer’s 401k plan, to roll over assets from a rollover IRS, or to roll over a distribution from a former employer’s 401k plan, into your company’s 401k plan. Includes the asset transfer policy notice.
The Asset Transfers-In Pac can be used for any employee who is funneling money into the company plan, whether or not he or she chooses to actively participate in the 401k plan.
Benefits of 401k Participation Pac
This Pac contains reasons to consider 401k participation; advantages of participating; a 401k as the best leverage against taxes; how a 401k can grow. It is given to employees to explain your 401k plan and generate enthusiasm and a desire to join.
Summarizes 401k-related company information. It includes, among other information, a roster of all eligible employees, their divisions, social security numbers, date hired, date terminated, estimated annual salary, and whether or not they are participants. It is used for verifying the database.
Information associated with annual compliance testing. See Chapter 8, Testing.
Lists the names and total number of eligible employees as of the current date, along with their social security numbers.
Lists the outstanding 401k loans alphabetically by employee as of the current date. Included for each loan are the start date, amount of loan, rate, term, amortized payment, desired payment, and amount to pay off the loan. Any holds on the loan are also indicated.
This is the only report providing this information. It is important to keep an updated copy, and perhaps provide a copy to Payroll.
Lists the names and total number of current participants, along with their social security numbers. Can be cross-referenced with the current eligibles list to ascertain how many eligibles are not participants. The employee census report also provides this information.
Duplicate Mutual Fund Statement Authorization
This authorization is sent by the Plan Administrator to the investment company to authorize establishment of secondary, duplicate statements to be sent to participants’ home addresses.
Duplicate Statement Address Change
See Request for Statement Address Change.
The plan administration software generates mailing labels for various key groups: plan participants, eligible nonparticipants, and all employees in the database. These lists and labels are useful in broadcasting important information throughout the company, or targeting a specific group (e.g., eligible nonparticipants) about a specific upcoming event or deadline (e.g., open enrollment period).
A series of reports that list (1) all employees, (2) all employees eligible to participate in the 401k plan, (3) employees not eligible to participate in the plan, (4) employees who are eligible but have no enrollment application on file, (5) terminated employees, and (6) employees over 70 1/2 years of age. You can select each of these lists to include all divisions, all divisions with page breaks between divisions, or a single division.
In every case, the chosen report lists, alphabetically by employee name, the social security number, division, whether or not the employee is eligible, whether or not the employee is a participant, the employee’s birth, hire, and (if applicable) termination dates, and whether the employee is part-time, a company officer, or a 1% or 5% owner.
TIP… Because the employee census reports combine information from several reports into one, it is the best report to verify employee information.
For each of your company’s investment options, this report lists the employees holding that investment, the account number, and the percentage of the employee’s portfolio that investment represents.
You will need this report if one fund merges with another, if it closes, or if fund numbers change. This report will provide you with information to allow you to go into the employee records and change the fund or account numbers if necessary.
An individual report for each participant that includes the information in the “Employee Information” window, plus his or her portfolios, allocations, and account numbers. It also shows, as of the current date, the totals of the participant’s account activities. It is used for detailed review of all transactions attributable to one individual participant.
All the individual employee profiles in one file.
Employee Request for Duplicate Statements
This form is sent by the Plan Administrator to participants so that they can indicate their desire to have duplicate investment company statements sent directly to their home addresses.
This summary lists, alphabetically by participant, the percent vested as of the current date. It also lists each employee’s social security number, eligibility date, total dollar amount of employer contributions, and total dollar amount currently vested.
When an employee leaves the company, you can see what he or she is entitled to, if he or she is not fully vested.
The terms and conditions agreed on between 401k Pro, Inc. and your company with respect to your run-it-yourself 401k plan.
The 401k participant enrollment pac presents the basics about the company 401k plan. Used by employees to join the plan and indicate deferral, investment, and beneficiary designations; decline to join the plan; change the amount/percentage of pay being deferred monthly; change investment choices; change beneficiary designation. Contains a summary of the plan and its benefits and the enrollment form, which is also used to change previous enrollment information.
EXPORT: Monthly Purchases Allocation Diskette
If the monthly purchases allocation are numerous, you can transfer the information to a diskette that the investment company can use to automatically enter the data into its computer. Some investment companies will request that allocations be sent on a diskette in addition to the allocation roster.
The Investment Decisions Pac is given to employees to help them in their 401k investment decisions. Contains information about the retirement savings shortfall and how to choose the right kinds of investment portfolios.
This authorization is sent by the Plan Administrator to the investment company to authorize the company to roll over 401k shares into an IRA account.
A letter of indemnity is used by the Plan Administrator to indemnify (i.e., hold harmless) the investment company for following the Plan Administrator’s specific written instructions.
Mandatory Distribution Fact Sheet (Over 70 1/2)
A document that advises participants of the regulations governing mandatory distributions when the participant reaches 70 1/2 years of age. It covers when withdrawals begin, distribution options, calculation of life expectancy, and federal tax withholding.
Missing Enrollment Applications
A report for you to see which employees are listed in the system as eligible nonparticipants, but have no completed enrollment application on file. All eligible employees must complete an enrollment form, even if they choose to decline participation. This report notifies you of those employees who have not submitted a form for your company files.
Monthly Contribution Verification by Division
An internal report that gives, separately by division, an alphabetical listing of participants, social security numbers, employee and employer contributions, loan repayments, and W-2 earnings. This is an internal report for verification purposes; it is especially useful if your company has several payrolls that merge into the 401k. A report can be given to each department head for verification.
Monthly Contributions Proof Sheet
This internal report is used by you to verify and compare the contribution (employee and employer matching), loan repayments (if any), and wage inputs for each participant against a payroll register to be sure all contributions are correct and accounted for. This report is also useful in verifying and cross-checking W-2 wage data, which is essential in compliance tests.
Monthly Contributions Proof Sheet by Division
This internal report contains the same information as the Monthly Contributions Proof Sheet but is sorted and totaled by division.
Monthly Contributions Summary by Division
This internal report lists totals, for each division, of employee contributions, employer matching contributions, loan repayments, and participant monthly earnings and gives a grand total for all divisions.
Monthly Contributions Worksheet
If you do not receive Payroll reports containing the needed information, you can use this worksheet to compile the information that needs to be entered into the your plan administration software system each given month. You can print the worksheet, fill in the data, and enter it.
Monthly Employee Statement (Single)
The Monthly Employee Statement for a particular participant is titled “401k Contribution Report.” You can select a single statement to view or print by typing the first letter of the person’s last name; the names of all participants whose last name starts with that letter will appear in the pulldown menu accessed by the arrow to the right of the Employee field. You can then select the name you want. Or you can continue typing in the last name and the employee’s name will appear. Or you can select the name from the pulldown menu. You must also enter the year and month of the statement you want.
The 401k Contribution Report includes fields for the participant’s current investment choices and percentage of contributions that go to each investment, the participant’s chosen pre-tax contribution percentage, and his or her vested percentage. The report summarizes the account’s current activity (monthly and year-to-date contributions, both employee and employer, plus loan repayments, if any. It also has a historical summary of total purchases and liquidations, current loan payoff, if any, and details of purchases to date.
There is also a space for special announcements that you may wish to convey to the participants.
Monthly Employee Statements (All)
You can print out or view all of the individual contribution reports described above, in alphabetical order by division, for any selected month of any plan year.
Each participant receives a copy of his or her most recent statement each month.
Monthly Investment Purchase Order
This report is sent to the investment company with an accompanying check. The report is sorted by portfolio, listing all participants using a specific investment portfolio, and the requisite account numbers and amounts to be invested; it includes loan payments. For added verification and reliability the portfolio name and cusip number are listed on each page, as is the employer’s name and federal identification number. The report is designed to allow speedy, accurate key-in of purchase information by the investment company data entry departments.
Monthly Investments Purchase Order Summary
Only for specific investment companies requiring additional detail.
Monthly Mutual Fund Applications
Titled “Generic Mutual Fund Application,” this form must be signed by the Plan Administrator and sent to the investment company with payment and the Monthly Investments Purchase Order. This form contains all the information necessary to open an individual 401k account, and specifies the name of the participant, the plan name, the trustee’s name, the employer’s federal identification number (or the participant’s social security number), the specific investment and dollar amount of the initial purchase, and mailing address. Creation of this form automatically by the software is a huge advantage in speed and accuracy, and eliminates the need for you to pull an application from the investment prospectus and fill it in each time a new participant joins the plan, or each time a participant changes his or her investment choices.
NOTE… Some investment companies also want their own application forms completed and attached to the 401k™ generic mutual fund application.
An announcement to employees of the adoption of a 401k plan by your company.
The your plan administration software IRS-approved plan that is made available for adoption by the clients of the prototype sponsor. 401k Pro, Inc., is a prototype sponsor.
An authorization sent by the Plan Administrator to the investment company to change the FBO name in the registration of the participant’s account(s) because of a change in marital status.
Request for Statement Address Change
A request sent by the Plan Administrator to the investment company to change the secondary, duplicate statement mailing address for a participant’s account(s).
Rollover or Deposit to a New Account
The form sent by the Plan Administrator to the investment company instructing the investment company to establish an account in the participant’s name. Used for either rollovers or the initial monthly contribution of a participant (if the latter is done outside the normal monthly processing).
Rollover or Deposit to an Existing Account
The form sent by the Plan Administrator to the investment company to instruct the investment company to deposit specified amounts of money into a participant’s specified existing account(s). The deposit can be a monthly contribution, loan repayment, or rollover.
You can create auditor’s reports on an as-needed basis. The purpose of these reports is to assist you (and your plan’s auditors) in preparing a preliminary Form 5500 or 5500-C or R.
The auditor’s reports are based on the synthesis of stored data and data you input. You input only year-end (e.g., December 31st) dollar balance information derived from each separate investment account statement. Between these two dates and balances, the software inserts all contributions and related transactions (e.g., rollovers, loan withdrawals and payments, share exchanges, corrections, hardship withdrawals, etc.) that have occurred within the designated time frame. Auditors can quickly verify account activity on a micro scale or macro scale. Reports are organized by you to fit the auditor’s requirements. The reports are alphabetically sorted by participant, by investment portfolio, by investment “type” or group. The reports render a complete overview of all the basic financial activity that occurred within your plan for the year designated.
To create an auditor’s report, highlight Year End Auditor’s Worksheet, click on Print, then click on New, and enter the year for which you want to create the fiduciary.
Click on Generate. The grid is now created. Edit allows you to view, add to or delete data from the grid, or export data to Microsoft Excel:
• Add: Employee’s last name, first name, social security number, and portfolio
• Delete: Highlight using mouse on left-hand side, then click Delete. Line will be deleted
• Export: Will create a Microsoft Excel file called Auditor.xls. The file can be saved to your hard drive or to a floppy disk and transferred to another computer. When the file is opened in Excel, the report will appear as an Excel spreadsheet that can be manipulated and customized within that program.
Beginning balances will automatically appear in the grid. Ending balances from the December 31st fund statements need to be entered for each account. When finished, click on Save.
When finished, click Add to add another portfolio. You should have a set of numbers for each portfolio. When you are finished, click Exit. Clicking on Print will print the report on the screen.
Year-to-Date Activity Detail by Employee
This internal report lists, in a separate report for each participant, the year-to-date activity for that participant’s account, sorted by portfolio.
For any selected plan year, this log presents a separate report for each activity type (selected from the pulldown menu) listing by date, the activity type, employee name, division, social security number, and amount. The activity types include ADP test corrections, employee contributions, employer matching contributions, exchanges, forfeiture allocations, loan distributions, loan interest payments, loan principal repayments, non-vested forfeitures, other adjustments, rollovers, and trust transfers. A good reference report.
Year-to-Date Activity Recap by Month
An internal report showing, for any selected year, a summary of the year’s activity by month: the month-end, year-to-date totals for employee and employer contributions, loan repayments, rollovers, trust-to-trust transfers, loan distributions, distributions, ADP test corrections, non-vested forfeitures, and other adjustments.
Year-to-Date Activity Recap by Portfolio
An internal report sorted by portfolio and showing , for any selected year and alphabetically by employee, total employee and employer contributions, loan repayments, rollovers, trust-to-trust transfers, loan and other distributions, non-vested forfeitures, and other adjustments.
Year-to-Date Activity Summary by Employee
For any selected plan year, separate reports for each activity type (accessed through the pulldown menu in the “Reports” window) that summarize, alphabetically by employee, the year-to-date totals associated with that activity. Each report lists the employee’s name, social security number, address, and year-to-date total amount.
The activity types are the following:
• ADP correction
• Distribution
• Employee contribution
• Employer matching
• Exchange
• Forfeiture allocation
• Load distribution
• Loan interest
• Loan principal
• Nonvested forfeiture
• Other adjustments
• Rollover
• Trust transfer
Year-to-Date Contribution Statistics
This internal report summarizes, by division, for any selected plan year, the number of participants and eligible nonparticipants, the average monthly contribution amounts and percentages, and the percentage of participation. The report is not part of the ADP deferral testing, but instead is designed to assist you in assessing the overall popularity of the company’s 401k plan, division by division. It is useful for determining the relative participation level of each division, and assists management in identifying portions of the company that require more promotion of the 401k plan to boost overall company-wide participation.
Year-to-Date Contributions Summary by Division
An internal report that summarizes, by division, for any plan year, the year-to-date totals for individual participants’ employee contributions, employer matching contributions, loan repayments, and W-2 compensation. This internal report is used to verify and compare the year-to-date contribution and wage input against a payroll register to be sure all contributions are correct and accounted for. Separate reports can be sent to each division.
Year-to-Date Contributions Summary by Employee
An alphabetical listing by employee that summarizes the year-to-date contribution totals for each employee: employee contributions, employer matching contributions, loan repayments and year-to-date W-2 compensation.
Year-to-Date Investment by Fund/Month
For any selected year, a fund-by-fund summary, by month, of the amount of money invested in that fund and the percentage of total investments for that month that the amount represented. This report can be used, for example, to review the popularity of a given portfolio or to determine which portfolio(s) are the least popular and therefore candidates for suppressing.
This worksheet presents, in summary form for a particular year, data that you will need in preparing Form 5500.
An ad hoc report that lists alphabetically the names and social security numbers of all employees who participated during a given year.
Tells participants how to read their monthly contribution reports.
Your Money is Still in Our 401k
A document sent to former employees to remind them that they have money in your 401k. Goes with Form 115, which allows them to choose the kind of distribution they want.
U.S. Government Forms and Reports
As Plan Administrator, you are responsible for IRS reporting for your company 401k plan. Your plan administration software package includes free access to our 401k FedForms website (www.401kfedforms.com), which contains detailed information and instructions for completing these federal filings. 401k FedForms tells you which IRS Forms and Schedules are applicable to your particular plan, when each is due, and where within your plan administration system to find requested information.
401k FedForms is updated at least annually in light of IRS Form and Schedule changes as well as 401k plan administration software upgrades.
Note: Any rejected report must be corrected and refiled within 45 days after receipt by you of the rejected report.
