Plan Administration Guide Automated Services and Data ... · • Plan Sponsor/TPA provides a...

This information is provided for plan sponsor use in meeting fiduciary obligations. It is not intended for distribution to participants or for use as advertising or sales literature. Copyright © 2019 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. RS-46853-00 Expires 4/1/2022 Version 4.0

Plan Administration Guide Automated Services and Data Submission Methods

Version 4.0 March 2019


Contents

AUTOMATED SERVICES OVERVIEW ................................................................................................................. 5

GETTING THE DATA TO MASSMUTUAL ........................................................................................................... 7

OVERVIEW .................................................................................................................................................................. 7 Event-Based Transacting ....................................................................................................................................... 7 Regular File Feed Submission ............................................................................................................................... 7

DATA SUBMISSION ..................................................................................................................................................... 7 Event-Based Transacting ....................................................................................................................................... 7 Regular File Feed Submission ............................................................................................................................... 8

AUTOMATED SERVICES: EVENT BASED TRASACTING…………………………………………………..10

ENROLLMENT PROCESS............................................................................................................................................. 10 AUTOMATIC ENROLLMENT ....................................................................................................................................... 10 REINSTATEMENT OF PARTICIPANTS ........................................................................................................................... 11 SALARY CONTRIBUTION CHANGES ........................................................................................................................... 11 LOANS ...................................................................................................................................................................... 12

General Loan Process ......................................................................................................................................... 12 Spousal Consent, Residential, or Hardship Loan Process .................................................................................. 12 Loan Payoff Notification ..................................................................................................................................... 13

HARDSHIP WITHDRAWAL SUSPENSION MONITORING ............................................................................................... 13 TERMINATION/RETIREMENT/DISABILITY .................................................................................................................. 14 EMPLOYEE MOVES VIA AN EVENT BASED TRANSACTION .......................................................................................... 16

DATA TO MASSMUTUAL: EVENT BASED TRANSACTING ......................................................................... 17

CONTRIBUTION FILE SUBMISSION ............................................................................................................................. 17 File Submission/Processing ................................................................................................................................. 17 Contribution file(s) validation ............................................................................................................................. 17

LOAN REPAYMENT FILE SUBMISSION ........................................................................................................................ 18 File Submission/Processing ................................................................................................................................. 18 Loan file(s) validation.......................................................................................................................................... 19

AUTOMATED SERVICES: FILE FEED SUBMISSION ..................................................................................... 21

ELIGIBILITY DETERMINATION/ENROLLMENT PROCESSING ........................................................................................ 21 AUTOMATIC ENROLLMENT ....................................................................................................................................... 21 REINSTATEMENT OF PARTICIPANTS ........................................................................................................................... 21 SALARY CONTRIBUTION CHANGES ........................................................................................................................... 22 LOANS ...................................................................................................................................................................... 23

General Loan Process ......................................................................................................................................... 23 Spousal Consent, Residential, or Hardship Loan Process .................................................................................. 23 Loan Payoff Notification ..................................................................................................................................... 24

HARDSHIP WITHDRAWALS SUSPENSION MONITORING.............................................................................................. 24 TERMINATION/RETIREMENT/DISABILITY .................................................................................................................. 25 EMPLOYEE MOVES ................................................................................................................................................... 26 PLAN YEAR END SERVICES ...................................................................................................................................... 26 PARTICIPANT VESTING UPDATES (FOR PLANS USING HOURS FOR VESTING) .............................................................. 26

DATA TO MASSMUTUAL: FILE SUBMISSION ................................................................................................ 27

CONTRIBUTION FILE SUBMISSION ............................................................................................................................. 27


File Submission/Processing ................................................................................................................................. 27 Contribution file(s) validation ............................................................................................................................. 27

LOAN REPAYMENT FILE SUBMISSION ........................................................................................................................ 28 File Submission/Processing ................................................................................................................................. 28 Loan file(s) validation.......................................................................................................................................... 29

DEMOGRAPHIC FILE SUBMISSION ............................................................................................................................. 29

MASSMUTUAL PAYROLL FEEDBACK TO THE PLAN SPONSOR ............................................................. 35

PAYROLL FEEDBACK TIMING .................................................................................................................................... 36

AUTOMATED SERVICES REPORTING ............................................................................................................. 38

Scheduled Payouts Report ................................................................................................................................... 38 ISW Suspension Report ........................................................................................................................................ 38 Participation Status Report ................................................................................................................................. 38 Future Eligible Employees Report ....................................................................................................................... 38 Eligible Employees Report .................................................................................................................................. 38


Automated Services Overview


Automated Services Overview

MassMutual offers a suite of services to assist a Plan Sponsor/TPA in the daily administration of their Plan(s).

Service Description

Eligibility Calculation MassMutual determines enrollment eligibility based on the plan provisions.

Enrollment Solicitation / Self Registration Postcard

MassMutual mails enrollment materials and self-registration postcardsto participants; Participants have the ability to enroll via the participant phone line or participant website. MassMutual notifies the Plan Sponsor/TPA of newly enrolled participants’ contribution elections via a payroll feedback report.

Salary Contribution Changes Participants have the ability to change their contribution election via the participant phone line or website on a daily basis. MassMutual notifies the Plan Sponsor/TPA of the participants’ contribution elections via the Payroll Feedback Report. The Plan Sponsor makes the appropriate updates to payroll according to the Plan Document.

Direct Loans MassMutual mails loan checks and supporting documentation directly to participants’ homes. MassMutual notifies Plan Sponsor/TPA of new loan information, loan refinance information and closed loans via Payroll Feedback Report and the plan sponsor website.

Automated Terminations Upon notification of a “separation from service”, MassMutual automatically mails distribution information customized to the plan and current account balance to the participant’s home. If the participant does not respond to make an election, MassMutual automatically takes the appropriate action (i.e., defer account balance, automated cash out, or mandatory automatic rollover).

Hardship Withdrawal Suspension Monitoring*

* For clients who elect to use the Safe Harbor In-Service hardship withdrawal rules. The Bipartisan Budget Act of 2018 has eliminated the six-month elective deferral suspension that may apply to hardship distributions made from a 401(k) or 403(b) plan. This change is optional for the 2019 plan year. However, on or after January 1, 2020, a 401(k) or 403(b) plan may not provide for a suspension of an employee’s elective contributions or employer contributions as a condition of obtaining a hardship distribution. MassMutual is defaulting to eliminating the six-month elective deferral suspension for plan years starting in 2019 unless otherwise instructed by the plan sponsor or its designee.

MassMutual notifies the Plan Sponsor/TPA to suspend the contribution percentages and update payroll deferral elections to zero for participants who have processed a hardship distribution. MassMutual tracks the hardship suspension period and notifies participants that their prior election will be automatically restored.

Note: Governmental 457(b) plans may use Hardship Suspension Monitoring in the administration of unforeseeable emergencies.

In order to receive these services, the Plan Sponsor/TPA provides data in one of these formats:

• Plan Sponsor/TPA enters the data via the plan sponsor website. (Referred to as event-based transacting throughout the document)


• Plan Sponsor/TPA provides a regular file feed submission to MassMutual.

This guide is a general overview of the services available and discusses how the data is exchanged between MassMutual and the Plan Sponsor/TPA to accommodate the services. To confirm the services that you have elected refer to your Plan’s Services Agreement.

Getting the Data TO MassMutual


Getting the data to MassMutual

Overview There are two different methods to provide data to MassMutual:

Event-Based Transacting

• Provides for employee information to be entered one at a time through the plan sponsor website.

• This method is generally recommended for plans with less than 250 employees and/or a low turnover and hiring rate.

Regular File Feed Submission

• Provides for the submission of regular file feeds containing demographic and compensation data for all employees.

• This method is generally recommended for plans with 250 or more employees and/or a high turnover and hiring rate.

Data Submission

Event-Based Transacting

The following data is entered via the plan sponsor website:

• Newly eligible employees(via manual entry or file upload)

• Address changes

• Termination/Retirement/Disability status updates

The following file is submitted via the plan sponsor website:

• Contribution/Loan Repayment file

• Eligible employees file


Regular File Feed Submission

Data Transmission

Payroll and demographic data is electronically transmitted between the Plan Sponsor/TPA and MassMutual. The files are provided in a format that is agreeable to both MassMutual and the Plan Sponsor and are transferred to MassMutual on a pre-determined basis. The files are processed in the order received.

The Plan Sponsor provides MassMutual with the following data in an electronic file:

• Payroll deducted participant contributions, employer contributions and loan repayments

• Demographic data for new employees and existing employees whose data changed since preparation of the last files, and

• Compensation and hour data.

File Processing

Upon receipt, demographic, compensation, and/or contribution data are translated and processed. Data errors are reported and resolved by the Plan Sponsor/TPA (see below):

Data errors corrected in the files the following payroll period

Data errors corrected via the Event Log that is available on the plan sponsor website

Data errors posted manually

Totals are also reconciled against those provided by the Plan Sponsor. MassMutual notifies the Plan Sponsor/TPA through an e-mail transmission that the files either successfully processed or processed with errors.

NOTE: The MassMutual Specifications Document describes the detailed programming specifications for the files.


Getting the Data to MassMutual Automated Services

And Event Based Transacting


Automated Services: Event-based Transacting

Enrollment process The Plan Sponsor enters newly eligible employees on the plan sponsor website via manual entry or file upload. Employees can be entered as they are hired with future eligibility dates.

• MassMutual sends enrollment materials with a self-registration postcard to the employee’s home address. The enrollment materials are generated and mailed in advance of the plan’s eligibility date.

• Employee enrolls via the participant phone line or website.

• MassMutual reports the contribution election to the Plan Sponsor/TPA on the first regularly scheduled feedback report after the participant’s eligibility date.

• The Plan Sponsor/TPA will update the payroll records with the new contribution election by retrieving it from the payroll feedback report provided by MassMutual.

Automatic Enrollment The Plan Sponsor may elect to default all eligible employees to contribute a pre-determined percentage to their retirement plan.

• MassMutual provides enrollment materials to the employees eligible for the upcoming enrollment period. The materials include details on the automatic enrollment and a deadline date to opt-out of enrollment.

• When an employee does not opt-out of the election, MassMutual will update those employees’ deferral percentages to the plan’s default election. Their investment selections will be set to the Plan’s Participant Investment Selection Default Option.

• MassMutual includes the defaulted deferral percentages in the first payroll feedback report after the participant’s eligibility date or opt-out date, whichever comes first.


Reinstatement of participants The Plan Sponsor manually notifies MassMutual of rehired participants by completing a Participant Re-enrollment form. The form is available on the plan sponsor website under Plan Management – Plan Forms.

• MassMutual updates records accordingly and processes any necessary financial transactions.

• Participant can re-enroll via the participant phone line or website.

• Depending on plan provisions, reinstated participants’ contribution elections may be automatically reset to their election in effect prior to their separation of service.

• Depending on plan provisions, reinstated participants’ contribution elections may be increased by any missed automatic deferral increases between their separation of service and their reinstatement.

• MassMutual reports the contribution election changes to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report.

• The Plan Sponsor/TPA will update the payroll records with the new contribution election information by retrieving it from the payroll feedback report provided by MassMutual.

Salary Contribution Changes Participants can elect to make contribution changes daily via the participant phone line or website. Contribution minimums, maximums, and increments are identified in the plan document and set up on MassMutual’s recordkeeping system. Contribution percentage and dollar amount elections are available (depending on plan provisions).

• MassMutual reports the contribution changes to the Plan Sponsor/TPA through the regularly scheduled feedback report.

• The Plan Sponsor/TPA will update the payroll records with the new contribution information by retrieving it from the payroll feedback report provided by MassMutual.

• The Plan Sponsor/TPA will automatically restart contributions for eligible participants returning from a leave of absence.

Contribution Changes includes newly eligible employee elections, contribution changes, automatic enrollment percentages, hardship distribution suspensions1, and termination/retirement/disability notifications2.

1Governmental 457(b) plans may use Hardship Suspension Monitoring in the administration of unforeseeable emergencies. 2Zero elections due to the separation of service


Highly Compensated Employee Monitoring* A separate maximum for all sources may be applied for Highly Compensated Employees. A listing of Highly Compensated Employees will need to be provided to MassMutual at the beginning of each plan year in order to provide this service. *Note: This does not apply to TPA plans.

Loans

General Loan Process

A participant initiates a loan through the participant phone line or website by submitting the information required for loan processing.

• MassMutual mails the check and loan paperwork to the participant’s home if applicable.

• Participant both acknowledges receipt of completed copies of a Promissory Note and Security Agreement, Disclosure Statement for Personal Loan and Authorization for Loan Payroll Deduction and agrees to the terms contained therein by endorsing the check.

• MassMutual reports the loan payroll information to the Plan Sponsor/TPA through the regularly scheduled feedback report.

• The Plan Sponsor/TPA updates the payroll records with the new loan information by retrieving it from the payroll feedback report provided by MassMutual.

Spousal Consent, Residential, or Hardship Loan Process

The Participant initiates a loan through the participant phone line or website by submitting the information required for loan processing.

• MassMutual places the loan in a “pending” status and sends the appropriate paperwork to the participant’s home.

• The Participant returns the paperwork to the appropriate party for authorization.

• The appropriate party either approves or declines the loan on the plan sponsor website.

• If the loan is approved, MassMutual will mail the check and loan paperwork to the participant’s home.

• The Participant acknowledges receipt of the completed copies of a Promissory Note and Security Agreement, Disclosure Statement for Personal Loan and Authorization for Loan Payroll Deduction and agrees to the terms contained therein by endorsing the check.

• MassMutual reports the loan payroll information to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report.


• The Plan Sponsor/TPA will update the payroll records with the new loan information by retrieving it from the payroll feedback report provided by MassMutual.

Loan Payoff Notification

• A participant obtains a loan payoff amount through the participant phone line, participant website, or by contacting the Plan Sponsor/TPA. The loan payoff must be made in the form of a certified check or money order. For further information, please refer to the “Loan Transmittal Form” on the Sponsor Website for additional information on how to submit the payoff to MassMutual.

The Plan Sponsor/TPA mails certified check or money order once it is received from the participant to MassMutual.

• MassMutual applies the loan payoff and sends notification to the Plan Sponsor via a push email. MassMutual provides a Closed Loan Report via the plan sponsor website.

• The Plan Sponsor/TPA reviews the report or payroll feedback report and stops the loan repayments in their payroll system.

Hardship Withdrawal Suspension Monitoring The Bipartisan Budget Act of 2018 has eliminated the six-month elective deferral suspension following a hardship distribution from a 401(k) or 403(b) plan. This change is optional for the 2019 plan years but mandatory for any hardship distribution made on or after January 1, 2020. MassMutual will operationally apply the elimination of the six-month elective deferral suspension for plan years starting in 2019 unless otherwise instructed by the plan sponsor or its designee. For 2019, if the plan sponsor wishes to keep this requirement in the plan, the Plan, and all other qualified and non-qualified plans maintained by the Plan Sponsor may provide that the Participant’s contributions will be suspended for at least six (6) months after receipt of the hardship distribution. Employer contributions shall not be subject to suspension. I f specified in the plan document, for the plan 2019 plan year, hardship suspension monitoring is available for plans that use the Safe Harbor withdrawal rules for hardship distributions made in 2019. Governmental 457(b) plans may use Hardship Suspension monitoring in the administration of unforeseeable emergencies (note: the rules that apply to a distribution from a 457(b) plan on account of an unforeseeable emergency have not changed).

A hardship distribution may be requested by the participant by completing an In-Service Withdrawal Request Form and a Hardship Statement and returning it the party responsible for approving the distribution. The approval is made and the form is sent to MassMutual for processing. MassMutual processes the request and mails the check directly to the participant or Plan Sponsor/TPA (depends on plan election). The Plan Sponsor is notified of any participant receiving a hardship withdrawal and is responsible for suspending the participant from making contributions to the Plan following the date of distribution. The length of the suspension is identified in the Plan document.


If elected by the Plan in the Administrative Services Agreement and permitted in the plan document, for hardship distributions made in 2019, the Hardship Suspension Monitoring services will provide the following:

• MassMutual updates the participant’s deferral election to zero and reports it to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report. A calculated suspension end date is posted to the ISW Suspension Report available on the plan sponsor website.

• The Plan Sponsor/TPA will update the payroll records with a zero deferral by retrieving the percentage/amount from the payroll feedback report provided by MassMutual.

.

• Notification is sent to participants prior to the end of the suspension period informing them of the suspension end date and that their original election will be restored. Participants have the ability to make changes to this election via the participant phone line or website.

• The participant’s contribution election is provided on the payroll feedback report.

• The Plan Sponsor/TPA will update the payroll records with the new deferral election by retrieving it from the payroll feedback report provided by MassMutual.

Termination/Retirement/Disability The Plan Sponsor notifies MassMutual of a termination/retirement/disability by entering the participant’s information via the plan sponsor website.

• MassMutual mails distribution information customized to the plan and current account balance to the participant’s home address. For balances over the Plan’s Minimum Deferral amount, the participants receive a letter providing them with their balances and estimates of options available to them. They will be provided with our Retirement Specialist Group’s (RSG) contact information to assist them with any questions, or to obtain a distribution form. For balances under the Plan’s Minimum Deferral amount, the participants receive a letter and a distribution Action Form to complete.

• MassMutual updates the participant’s deferral election to zero and reports it to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report.

• The Plan Sponsor/TPA updates the payroll records with a zero deferral by retrieving the percentage/amount from the payroll feedback report provided by MassMutual.

• MassMutual receives the distribution form and reviews it for accuracy. If there are any issues or questions, MassMutual’s RSG group follows up directly with the participant for any missing information necessary to proceed.


• MassMutual processes and mails distribution to the participant’s home address or the Plan Sponsor (based on plan set up).

• MassMutual will automatically take the appropriate action if the participant does not respond to make an election based on the plan document.


Employee Moves via an event based transaction • The Plan Sponsor notifies MassMutual that a participant needs to be moved to an

alternate location.

• MassMutual moves the participant’s account to the new location according to plan provisions and client/TPA’s written instruction.


Data to MassMutual: Event Based Transacting

Contribution File Submission

File Submission/Processing

The Plan Sponsor will submit a contribution and loan repayment file on a per payroll basis.

• The Plan Sponsor will monitor the IRS Section 402(g) or 457(e) maximum deferral limit (as indexed) and plan limits through their payroll.

• The Plan Sponsor will suspend contributions following a hardship withdrawal. (Note:

Governmental 457(b) plans may use Hardship Suspension Monitoring in the administration of unforeseeable emergencies.)

• The Plan Sponsor provides the breakdown by contribution source(s) for each participant on the file. Contribution totals and the payroll effective date are also included in the file. The payroll effective date may be used to determine which plan year the contribution is used for Plan Year End Testing and Reporting.

• MassMutual translates the contribution data and reconciles contribution/loan totals against those provided by the Plan Sponsor/TPA.

• MassMutual will report data errors to the Plan Sponsor/TPA via an e-mail notification.

• MassMutual works with the Plan Sponsor/TPA to resolve any data errors.

• MassMutual verifies, notifies, and receives funding prior to posting the contribution data to participant accounts:

o MassMutual posts the contributions to participant accounts.

o MassMutual allocates the contribution amounts to the appropriate investment options based on participants’ investment election percentages stored on the system.

Note: The Plan Sponsor will inform MassMutual of any changes to their file to avoid any file format errors. File format changes must be tested and approved prior to submitting the first live production file.

Contribution file(s) validation

MassMutual will perform the following validations:

• Investment allocation percent is zero for contribution source - Invests contribution in the Plan’s elected default investment option.


• Suspension due to hardship - A warning message appears in the Plan Sponsor Website Event Log details. The Plan Sponsor is also notified via the Payroll Feedback Report to stop the payroll deduction and is responsible for stopping it in a timely manner. (Note: Governmental 457(b) plans may use Hardship Suspension monitoring in the administration of unforeseeable emergencies.)

• Terminated Status – Action is taken to process additional payments as appropriate.

• Negative Contributions – Negative contributions are identified and processed. Any shortages will need to be funded by the Plan Sponsor and may be assessed on the next expense invoice.

• Employee not in plan – An error is provided on the plan sponsor website Event Log. The Plan Sponsor will be contacted if additional information is needed.

• Non-numeric data – An error is provided on the plan sponsor website Event Log. The Plan Sponsor will be contacted if additional information is needed.

• Control totals – Discrepancies are reported on the plan sponsor website Event Log. The Plan Sponsor is responsible for correcting the control total discrepancy and resubmitting the file.

Loan Repayment file submission


The Plan Sponsor will submit a loan repayment file on a per payroll basis.

• The Plan Sponsor/TPA deducts loan repayments* via payroll deduction and sends them to MassMutual via an electronic file. The file includes the total loan repayment for each participant, the payroll effective date and the total for all of the participant loans on the file.

• MassMutual translates the loan data and reconciles loan totals against those provided by the Plan Sponsor/TPA.



• MassMutual verifies, notifies, and receives funding prior to posting the loan data to participant accounts:

o MassMutual posts the loan repayments to participant accounts:

o MassMutual allocates the loan amounts broken out by principal and interest payments according to the repayment schedule.


o MassMutual allocates the repayment to the appropriate investment options based on participants’ investment election percentages stored on the system. Loan repayments are also allocated pro rata to the sources from which the loan is withdrawn.

Note: The Plan Sponsor will inform MassMutual of any changes to their file to avoid any file format errors. File format changes must be tested and approved prior to submitting the first live production file. *When participants take a loan distribution from their Plan, MassMutual amortizes the loan and provides a repayment schedule via the plan sponsor website to reflect the amount that needs to be deducted according to the participant’s payroll frequency. The loan information is provided to the Plan Sponsor via the Payroll Feedback Report.

Loan file(s) validation

MassMutual will provide to the Plan Sponsor/TPA the following validation errors:

• Repayment amount does not equal amount expected

• Employee not in plan

• Repayment for a participant without a loan or no loan on file

• Non-numeric data

Negative loan repayments are accepted via file transfer and processed. Any previously closed loans will reopen if a negative loan repayment is received. Also if the first loan repayment remitted is a negative, does not process until a positive payment is received.


Getting the Data to MassMutual Automated Services

And File Feed Submission


Automated Services: File Feed Submission

Eligibility Determination/Enrollment processing The Plan Sponsor provides newly hired employees via a regularly scheduled demographic file. MassMutual determines the employee’s eligibility for an upcoming enrollment period based on the plan provisions.

MassMutual sends enrollment materials and a self-registration postcard to the employee’s home address. The enrollment materials are generated and mailed in advance of the plan’s eligibility date.

• Employee enrolls via the participant phone line or website.

• MassMutual reports the contribution election to the Plan Sponsor/TPA on the first regularly scheduled feedback report after the participant’s eligibility date.


Automatic Enrollment The Plan Sponsor may elect to default all eligible employees to contribute a pre-determined percentage to their retirement plan.

• MassMutual provides enrollment materials to the employees eligible for the upcoming enrollment period. The materials include details on the automatic enrollment and a deadline date to opt-out of the enrollment.

• When an employee does not opt-out of the election, MassMutual will update those employees’ deferral percentages to the plan’s default election. Their investment selections will be set to the Plan’s Participant Investment Selection Default Option.

• MassMutual includes the defaulted deferral percentages in the first payroll feedback report after the participant’s eligibility date or opt-out date, whichever comes first.

Reinstatement of participants The Plan Sponsor automatically notifies MassMutual of rehired participants via a regularly scheduled demographic file.

• MassMutual updates records accordingly and processes any necessary financial transactions.

• MassMutual generates enrollment materials and mails them to the participants' homes.


• Depending on plan provisions, reinstated participants’ contribution elections may be automatically reset to their contribution election in effect prior to their separation of service.

• Depending on plan provisions, reinstated participants’ contribution elections may be increased by any missed automatic deferral increases between their separation of service and their reinstatement.

• The participant can re-enroll via the participant phone line or website.

• MassMutual reports the contribution elections to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report.


Salary Contribution Changes Participants can elect to make contribution changes daily via the participant phone line or website. Contribution minimums, maximums, and increments are identified in the plan document and set up on MassMutual’s recordkeeping system. Contribution percentage and dollar amount elections are available (depending on plan provisions).

• MassMutual reports the contribution changes to the Plan Sponsor/TPA through the regularly scheduled feedback report.


• The Plan Sponsor/TPA will automatically restart contributions for eligible participants returning from a leave of absence.

• Contribution Changes includes newly eligible employee elections, contribution changes, automatic enrollment percentages, hardship distribution suspensions1, and termination/retirement/disability notifications2.

• • 1Governmental 457(b) plans may use Hardship Suspension monitoring in the administration of unforeseeable

emergencies. • 2Zero elections due to the separation of service

Highly Compensated Employee Monitoring* A separate maximum for all sources may be applied for Highly Compensated Employees. A listing of Highly Compensated Employees will need to be provided to MassMutual at the beginning of each plan year in order to provide this service. *Note: This does not apply to TPA plans.


Loans

General Loan Process

A participant initiates a loan through the participant phone line or website by submitting the information required for loan processing.

• MassMutual mails the check and loan paperwork to the participant’s home if applicable.

• Participant both acknowledges receipt of completed copies of a Promissory Note and Security Agreement, Disclosure Statement for Personal Loan and Authorization for Loan Payroll Deduction and agrees to the terms contained therein by endorsing the check.

• MassMutual reports the loan payroll information to the Plan Sponsor/TPA through the regularly scheduled feedback report.

• The Plan Sponsor/TPA updates the payroll records with the new loan information by retrieving it from the payroll feedback report provided by MassMutual.

Spousal Consent, Residential, or Hardship Loan Process

The Participant initiates a loan through the participant phone line or website by submitting the information required for loan processing.

• MassMutual places the loan in a “pending” status and sends the appropriate paperwork to the participant’s home.

• The Participant returns the paperwork to the appropriate party for authorization.

• The appropriate party either approves or declines the loan on the plan sponsor website.

• If the loan is approved, MassMutual will mail the check and loan paperwork to the participant’s home.

• The Participant acknowledges receipt of the completed copies of a Promissory Note and Security Agreement, Disclosure Statement for Personal Loan and Authorization for Loan Payroll Deduction and agrees to the terms contained therein by endorsing the check.

• MassMutual reports the loan payroll information to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report.

• The Plan Sponsor/TPA will update the payroll records with the new loan information by retrieving it from the payroll feedback report provided by MassMutual.


Loan Payoff Notification

• A participant obtains a loan payoff amount through the participant phone line, participant website, or by contacting the Plan Sponsor/TPA. The loan payoff must be made in the form of a certified check or money order. For further information, please refer to the “Loan Transmittal Form” on the Sponsor Website for additional information on how to submit the payoff to MassMutual.

The Plan Sponsor/TPA mails certified check or money order once it is received from the participant to MassMutual.

• MassMutual applies the loan payoff and sends notification to the Plan Sponsor via a push email. MassMutual provides a Closed Loan Report via the plan sponsor website.

• The Plan Sponsor/TPA reviews the report or payroll feedback report and stops the loan repayments in their payroll system.

Hardship Withdrawals Suspension Monitoring As indicated above, the Bipartisan Budget Act of 2018 has eliminated the six-month elective deferral suspension following a hardship distribution. This change is optional for the 2019 plan years but mandatory for any hardship distribution made on or after January 1, 2020. For plan sponsors who have elected to retain the deferral suspension following a hardship withdrawal, hardship suspension monitoring is available only for hardship distributions made in 2019, for plans that use the Safe Harbor withdrawal rules. Governmental 457(b) plans may use Hardship Suspension monitoring in the administration of unforeseeable emergencies (note: the rules that apply to a distribution from a 457(b) plan on account of an unforeseeable emergency have not changed).

A hardship distribution may be requested by the participant by completing an In-Service Withdrawal Request Form and a Hardship Statement and returning it the party responsible for approving the distribution. The approval is made and the form is sent to MassMutual for processing. MassMutual processes the request and mails the check directly to the participant or Plan Sponsor/TPA (depends on plan election). The Plan Sponsor is notified of any participant receiving a hardship withdrawal and is responsible for suspending the participant from making contributions to the Plan following the date of distribution. The length of the suspension is identified in the Plan document.

If elected by the Plan, the Hardship Suspension Monitoring services will provide the following:

• MassMutual updates the participant’s deferral election to zero and reports it to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report. A calculated suspension end date is posted to the ISW Suspension Report available on the plan sponsor website.

• The Plan Sponsor/TPA will update the payroll records with a zero deferral by retrieving the percentage/amount from the payroll feedback report provided by MassMutual.


• Notification is sent to participants prior to the end of the suspension period informing them of the suspension end date and that their original election will be restored. Participants have the ability to make changes to this election via the participant phone line or website.

• The participant’s contribution election is provided on the payroll feedback report.

• The Plan Sponsor/TPA will update the payroll records with the new deferral election by retrieving it from the payroll feedback report provided by MassMutual.

Termination/Retirement/Disability The Plan Sponsor/TPA notifies MassMutual of terminated/retired/deceased participants via the demographic file.

• MassMutual mails distribution information customized to the plan and current account balance to the participant’s home address. For balances over the Plan’s Minimum Deferral amount, the participants receive a letter providing them with their balances and estimates of options available to them. They will be provided with our Retirement Specialist Group’s (RSG) contact information to assist them with any questions, or to obtain a distribution form. For balances under the Plan’s Minimum Deferral amount, the participants receive a letter and a distribution Action Form to complete.

• MassMutual updates the participant’s deferral election to zero and reports it to the Plan Sponsor/TPA through the regularly scheduled payroll feedback report.

• The Plan Sponsor/TPA updates the payroll records with a zero deferral by retrieving the percentage/amount from the payroll feedback report provided by MassMutual.

• MassMutual receives the distribution form and reviews it for accuracy. If there are any issues or questions, MassMutual’s RSG group follows up directly with the participant for any missing information necessary to proceed.

• MassMutual processes and mails distribution to the participant’s home address or the Plan Sponsor (based on plan set up).

• MassMutual will automatically take the appropriate action if the participant does not respond to make an election based on the plan document.


Employee Moves • The Plan Sponsor/TPA automatically notifies MassMutual via the regularly scheduled

demographic file of an employee move to an alternate location.

• The move will prompt a move notification in the Event Log on the plan sponsor website.

• MassMutual moves the participant’s account to the new location according to plan provisions and client/TPA’s written instruction.

Plan Year End Services (for Plans subject to ERISA) • MassMutual offers a streamlined Plan Year End Testing process* when Demographic and

Compensation data is provided on a regular basis. • The Plan Sponsor is required to complete the 5500 Plan Census and perform a quality

check of compensation data for accuracy. • The Plan Sponsor is required to provide MassMutual with employee counts if the Plan is

part of a controlled group or the entire employee population is not being submitted on the demographic file.

*Please note that the Plan Year End benefits for Third Party Administrator (TPA) Plan Sponsors may be different as additional information may be required by the TPA.

Participant Vesting Updates (For plans using hours for vesting) • The Plan Sponsor/TPA submit actual hours on a per payroll period basis through a Compensation file.

• MassMutual uses this information to credit participants with an additional year of vesting credit as soon as they reach 1000 hours.

• MassMutual confirms the data received throughout the year with the Plan Sponsor/TPA at year end to confirm hours prior to making the final vesting updates for the year.


Data to MassMutual: File Submission

Contribution File Submission


The Plan Sponsor will submit a contribution and loan repayment file on a per payroll basis.

• The Plan Sponsor will monitor the IRS Section 402(g) or 457(e) maximum deferral limit (as indexed) and plan limits through their payroll.

• The Plan Sponsor will suspend contributions following a hardship withdrawal. (Note:

Governmental 457(b) plans may use Hardship Suspension monitoring in the administration of unforeseeable emergencies.)

• The Plan Sponsor provides the breakdown by contribution source(s) for each participant on the file. Contribution totals and the payroll effective date are also included in the file. The payroll effective date may be used to determine which plan year the contribution is used for Plan Year End Testing and Reporting.

• MassMutual translates the contribution data and reconciles contribution/loan totals against those provided by the Plan Sponsor/TPA.



• MassMutual verifies, notifies, and receives funding prior to posting the contribution data to participant accounts:

o MassMutual posts the contributions to participant accounts.

o MassMutual allocates the contribution amounts to the appropriate investment options based on participants’ investment election percentages stored on the system.

Note: The Plan Sponsor will inform MassMutual of any changes to their file to avoid any file format errors. File format changes must be tested and approved prior to submitting the first live production file.

Contribution file(s) validation

MassMutual will perform the following validations:

• Investment allocation percent is zero for contribution source - Invests contribution in the Plan’s elected default investment option.

• Suspension due to hardship -


• A warning message appears in the Plan Sponsor Website Event Log details. The Plan Sponsor is also notified via the Payroll Feedback Report to stop the payroll deduction and is responsible for stopping it in a timely manner. (Note: Governmental 457(b) plans may use Hardship Suspension monitoring in the administration of unforeseeable emergencies.)

• Terminated Status – Action is taken to process additional payments as appropriate.

• Negative Contributions – Negative contributions are identified and processed. Any shortages will need to be funded by the Plan Sponsor and may be assessed on the next expense invoice.

• Employee not in plan – An error is provided on the plan sponsor website Event Log. The Plan Sponsor will be contacted if additional information is needed.

• Non-numeric data – An error is provided on the plan sponsor website Event Log. The Plan Sponsor will be contacted if additional information is needed.

• Control totals – Discrepancies are reported on the plan sponsor website Event Log. The Plan Sponsor is responsible for correcting the control total discrepancy and resubmitting the file.

Loan Repayment file submission


The Plan Sponsor will submit a loan repayment file on a per payroll basis.

• The Plan Sponsor/TPA deducts loan repayments* via payroll deduction and sends them to MassMutual via an electronic file. The file includes the total loan repayment for each participant, the payroll effective date and the total for all of the participant loans on the file.

• MassMutual translates the loan data and reconciles loan totals against those provided by the Plan Sponsor/TPA.



• MassMutual verifies, notifies, and receives funding prior to posting the loan data to participant accounts:

o MassMutual posts the loan repayments to participant accounts:

o MassMutual allocates the loan amounts broken out by principal and interest payments according to the repayment schedule.


o MassMutual allocates the repayment to the appropriate investment options based on participants’ investment election percentages stored on the system. Loan repayments are also allocated pro rata to the sources from which the loan is withdrawn.

Note: The Plan Sponsor will inform MassMutual of any changes to their file to avoid any file format errors. File format changes must be tested and approved prior to submitting the first live production file. *When participants take a loan distribution from their Plan, MassMutual amortizes the loan and provides a repayment schedule via the plan sponsor website to reflect the amount that needs to be deducted according to the participant’s payroll frequency. The loan information is provided to the Plan Sponsor via the Payroll Feedback Report.

Loan file(s) validation

MassMutual will provide to the Plan Sponsor/TPA the following validation errors:

• Repayment amount does not equal amount expected

• Employee not in plan

• Repayment for a participant without a loan or no loan on file

• Non-numeric data

Negative loan repayments are accepted via file transfer and processed. Any previously closed loans will reopen if a negative loan repayment is received. Also if the first loan repayment remitted is a negative, does not process until a positive payment is received.

Demographic File Submission The Plan Sponsor provides demographic data on a regular basis (if elected). This data is submitted on a per payroll basis.

• The Plan Sponsor provides demographic information for newly hired employees and existing employees.

• The Plan Sponsor provides the following data on the file:

• Notification of new employees • Name changes • Address updates • Marital status changes • Employment status changes(i.e. active, terminated, deceased, leave etc.) • Payroll frequency changes • Employee classification changes

• MassMutual translates and processes the demographic data.


• MassMutual will report data errors to the Plan Sponsor/TPA on the plan sponsor website – Event Log with an option for an e-mail notification.


• Plan Sponsor will inform MassMutual of any changes to their file to avoid any file format errors. File format changes must be tested and approved prior to submitting the first live production file.


Common Demographic File Validations

Validation Type Message Reason Action

Date Message The hire date on file xx/xx/xxxx does not match the hire date on record xx/xx/xxxx. Any hire date changes must be submitted on an individual basis. Please use the error correction utility to correct and submit this record

The hire date on the demographic file does not match the hire date that MassMutual currently has on its recordkeeping system.

Confirm the correct hire date for the employee. The hire date is used to determine eligibility and vesting so it is critical that MassMutual have the correct date on record.

Participant Move Matching social security number exists within this contract in a different subscriber. Person not added. Possible move situation. This error prevents you from correcting any errors for this employee. Please correct file and resend

The participant exists in one subscriber (location) on MassMutual’s recordkeeping system and the demographic file indicates the participant belongs in a new subscriber (location).

Contact your MM Account Representative to confirm whether or not this move request is correct. If it is correct, your MM Account Representative will initiate the request to move the participant into the new location.

Future History Unable to process status change. Future history records exist for SSN. This error prevents you from correcting any errors for this employee. Please correct file and resend.

The demographic file contains a status change date earlier than the last status date received. The record errored due to the dates being out of chronological order (Example: The last record MassMutual has on file is a terminated status as of 4/15/2015. The file now contains a terminated status of 4/1/2015).

Review your payroll records to determine the correct date. If the date at MassMutual is correct, please correct your file to reflect the date. If the date at MassMutual is incorrect, please notify your MassMutual Account Representative to correct the date.

Invalid Information Varies depending on the data that is invalid or null.

MassMutual has certain required fields on the file. If the data on the file is null or invalid, the record will error. Examples: Employee Class Code, Subset, etc.

Update the file to reflect the correct information.


Common Demographic File Validations (continued)

Validation Type Message Reason Action

Date Message Varies depending on the data that is invalid or null.

MassMutual has certain required fields on the file. If the data on the file is null or invalid, the record will error. Examples: Employee Birth date, hire date, etc.

Update the file to reflect the correct information.

Reinstatement Possible reinstatement detected. Follow up with sponsor required.

An active status was received for a participant who is currently terminated on MassMutual’s recordkeeping system.

Contact your MassMutual Account Representative to confirm the rehire date.

Note: If you consistently report your rehires in the same manner, you may automate the rehire process. Contact your MassMutual Account Representative for more information.


Compensation and Service Data File Submission The Plan Sponsor provides compensation and hours of service data via a Compensation file submission on a per pay period basis.

• The Plan Sponsor provides the following data on the file for the payroll period:

• Salary data for ADP/ACP(Non-discrimination) Testing purposes • Salary data for 415(Limitation)Testing purposes • Salary data for Contribution Allocation purposes • Hours worked for each participant Note: If the plan requires hours for eligibility and or vesting, hours are required for all employees. If the Plan Sponsor is not currently tracking hours for salaried employees, they should work with the payroll vendor to program for them.

• MassMutual translates and processes the compensation data.



• Plan Sponsor will inform MassMutual of any changes to their file to avoid any file format errors. File format changes must be tested and approved prior to submitting the first live production file.


Getting the Data FROM MassMutual Payroll Feedback Reports


MassMutual Payroll Feedback to the Plan Sponsor

• MassMutual generates feedback data for an agreed upon frequency (generally the same as the Plan Sponsor's payroll frequency).

• The data is generally available on or before 12:00 PM EST on the agreed upon week day* o *Holiday Note: If a holiday occurs during the week you expect to retrieve your data from

MassMutual, it may be delayed. For example, if Friday is the normal retrieval day, when Thanksgiving Day occurs (on a Thursday) the file will not be available on Friday. It will be available the next business day (Monday). If you or your payroll vendor are programming an automatic retrieval of the file, please be sure there is a process in place to retrieve the file on a later day. (MassMutual follows the stock market holiday calendar.)

• The feedback data contain all transactions collected via the participant phone line or participant website for the period ending two business days prior to the transmittal of the data and includes the following:

o Salary contribution percentage/dollar amount changes for both newly enrolled participants and existing participants.

Important note * New enrollee changes are fed back on the data file after the employee reaches his/her eligibility date

o For automatic enrollment plans, the plan’s default percentage will be fed back on the file following the end of the opt out period (unless a participant opts out of the enrollment).

o Contribution suspensions due to hardship distributions. (Note: Governmental 457(b) plans may use Hardship Suspension Monitoring in the administration of unforeseeable emergencies.)

o Loan Changes includes loan start date, loan end date, principal and interest, payment amount, frequency, and payment count. These changes include new loans, loan refinances, and closed loans.

• MassMutual places loans in “pending status” for loan transactions requiring additional supporting documentation:

o Residential loans o Hardship loans o Loans requiring spousal consent

• The participant provides the Plan Sponsor with the required documentation.

The Plan Sponsor approves the loan via the plan sponsor website, the check is released will be released and mailed to the participant. The loan is reported in the next feedback data report.

• The Plan Sponsor retrieves the salary contribution and/or loan changes and updates their payroll accordingly.


Payroll Feedback Timing The chart below reflects how the timing works for data feedback provided on a weekly basis.

Report run date Data available to Plan Sponsor/TPA

Timeframe for weekly frequency *

Friday Monday Includes changes from Friday (of the week prior to last week) through 4:00 PM EST Thursday (of last week).

Monday

Tuesday Includes changes from Monday (of last week) through 4:00PM EST Friday (of last week).

Tuesday Wednesday Includes changes from Tuesday (of last week) through 4:00PM EST Monday (of this week).

Wednesday Thursday Includes changes from Wednesday (of last week) through 4:00PM EST Tuesday (of this week).

Thursday Friday Includes changes from Thursday (of last week) through 4:00PM EST Wednesday (of this week).

*If the payroll is bi-weekly, please contact your MassMutual representative to discuss the report timing

Availability Time The data is generally available on or before 12:00 PM EST on the agreed upon weekday.

Holiday Timing If a holiday occurs during the week you expect to retrieve your data from MassMutual, it may be delayed. For example, if Friday is the normal retrieval day, when Thanksgiving Day occurs (on a Thursday) the file will not be available on Friday. It will be available the next business day (Monday). If you or your payroll vendor are programming an automatic retrieval of the file, please be sure there is a process in place to retrieve the file on a later day. Please note that MassMutual follows the stock market holiday calendar. These days include: New Year’s Day, Martin Luther King Day, President’s Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.


Automated Services Reports


Automated Services Reporting

The following Automated Services Reports are available on the plan sponsor website:

Clients using Event Based Transactions or File Feed Submission

Scheduled Payouts Report This report contains the names of participants who were sent to MassMutual on the demographic file or via the plan sponsor website with a status change of “not active” (i.e., terminated, retired, deceased, etc.). These participants were sent distribution information and their contribution election was changed to zero. Participants are given approximately 60 days to return their forms to MassMutual. The effective date is the participant’s termination date. The scheduled cashout date is the date the participant’s status change (cashout or deferral) will be processed. ISW Suspension Report This report identifies the participants who made a hardship withdrawal and are suspended from making contributions to the plan. It contains the participant name, effective date of the withdrawal and the effective date of the suspension lift. Participation Status Report This report displays employees who became eligible to participate during a selected time period as well as those who were solicited and currently participating.

Clients using Event Based Transactions Only

Future Eligible Employees Report This report contains the eligible employees for the Plan’s next and future entry dates. Clients using File Feed Submission Only

Eligible Employees Report This report contains the most recent employees identified as eligible for the Plan’s next entry date. This report is available for approximately 3 to 5 days (Determined when Automated Services set-up) and provides the Plan Sponsor with the ability to deselect employees who should not receive enrollment materials. Note: Timing depends on the length of time between the employee “flagged” for enrollment and the date the materials are mailed.

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