What is the target market for American Trust?
We target small to mid-sized businesses ranging from $1 million to $30 million in plan assets.
Does American Trust offer bilingual assistance?
We are prepared to provide any materials, communications, telephone support, participant website access, and educational presentations in English and Spanish.
How are on-site initial enrollment meetings, as well as annual and regularly scheduled meetings set-up?
This really depends on the needs of the company. This may include location, size, and number of employees. With companies that have multiple shifts, we generally run at least one group meeting for each shift, at each location.
What is your recommended number of meetings to schedule?
Ideally, group meetings have five to 30 participants followed by individual employee meetings. If you have two or more locations, we may spend multiple days conducting education sessions. Enrollment meetings generally coincide with quarterly participant statement delivery. To set-up enrollment or education meetings, contact your account manager.
What is our philosophy in assisting participants to be successful at retirement?
Our philosophy on successful retirement begins with knowledge. We customize our approach to each participant's knowledge level by pairing group enrollment and education meetings with individual meetings. Our education and investment specialists provide personal, professional assistance and offer choices without confusion. They answer any questions and processing requests and all questions moving forward. There are no complicated prompts or voice response systems — just one direct number to dial.
How are fees disclosed?
There are no hidden fees with American Trust. We fully disclose all our fees upfront in an easy-to-read document on an ongoing basis. You will know the "true" cost of your plan in dollar terms and as a percentage of assets.
Why should a company have a 401(k) plan?
A few advantages of offering a retirement plan within your company benefits package include:
- Recruiting and retaining talented employees, reducing your turnover rates
- Allowing employees to save for retirement on a before-tax or if implemented by the employer, an after-tax basis, through Roth contributions
- Generating tax deductions for the employer
- Growing employee and employer contributions through the investments opportunities
What is a Traditional 401(k) plan?
Flexibility is the leading advantage of a traditional 401(k) Plan. We can help you determine the best way to structure your employer contributions, eligibility requirements, and vesting schedules to meet your business needs. Payroll deducted employee contributions are also available within 401(k) plans and annual testing is required to ensure this benefit is not discriminating against groups of employees.
What is a Safe Harbor 401(k) plan?
Safe Harbor 401(k) plans are similar to a Traditional 401(k) plan; however, with a Safe Harbor 401(k), the annual nondiscrimination testing is not required. In return, the employer must provide a minimum contribution with immediate vesting to the eligible employees.
Who can participate in a 401(k) plan?
Every company may personalize their employee eligibility requirements within their plan. Generally, employees who are over age 21 and completed one year of service with over 1,000 hours of work are eligible to participant. Employees cannot be excluded because of their age or part-time status; however, if the employees have another plan available to them, they may be excluded. For example, companies with collective bargaining agreements may have employees covered under a "company plan" and a "union plan".
How do I decide my employer contribution amount?
We consult with you to evaluate your employer contribution. Your employee demographics and turnover rates help you determine which route is best for your business. A discretionary company match or flexible profit sharing are available if you decide to contribute to a traditional 401(k) plan. Under a Safe Harbor 401(k) plan you only have two options: 1.Profit sharing program equal to 3 percent of compensation, or 2. Match program up to at least 4 percent of compensation. The most common Safe Harbor Match calculation is dollar for dollar on the first 3 percent and fifty cents on the dollar for the next 2 percent of compensation.
What is the difference between match and profit sharing?
A company match is only given to employees that are personally contributing to the plan and a profit sharing is given to all eligible employees. Profit sharing is also referred to as nonelective contribution.
What are the current contribution limits?
What is the difference between a source and fund?
A fund is an individual investment including mutual funds, stocks, bonds, money market funds, and other investment vehicles. The source represents where the contribution comes from and is made up of funds. Common sources you may have in your plan include: employee pre-tax deferral, employee Roth contributions, company match, and company profit sharing.
What is vesting?
Employee contributions, Safe Harbor employer contributions, and any earnings or losses from these contributions are always fully vested. Other employer contribution sources may have a vesting schedule, designed to reward employees who stay employed over an extended period of time. If an employee leaves the company prior to being fully vested in a source, the non-vested funds are forfeited back. For example, if a company has a six year graded vesting schedule and an employee leaves after four years, they may need to surrender a portion of employer contribution.
What is an ERISA section §3(38) fiduciary?
The Employee Retirement Income Security Act of 1974 (ERISA) allows you to delegate considerable responsibility and liability by hiring an investment manager as defined by ERISA §3(38). The investment manager focuses on the selection, monitoring, and removal functions of the plan's investment options. Within our discretionary trustee services, we act as your §3(38) fiduciary.
Who can be a discretionary trustee?
Primary discretionary trustee qualifiers include banks or trust companies that hold securities under their name, are certified to review and make recommendations regarding investments, and assume full responsibility and liability for the investment selection, monitoring, and removal within the plan.
Why should I hire a discretionary trustee and investment manager?
There are many reasons you should hire a discretionary trustee and investment manager. It can save you time, alleviate liability, reduce risk of litigation, lowers audit expenses, share knowledge and expertise with you, and offer extra protection regarding fees and investments.
What type of due diligence is exercised when selecting funds?
Our due diligence emphasizes six key elements we believe are essential to understanding the attractiveness and quality of each manager strategy. This same review process is used to review new managers, as well as monitor existing ones. The key elements include performance, risk, portfolio assessment, strategy, operations, and firm review.
Does American Trust partner with other portfolio managers?
We do provide our own proprietary investment management services, and also partner with several highly successful portfolio managers to enable plan sponsors to bring a wider variety of options and risk levels to our participants. These managers employ differing investment themes and disciplines; therefore, allowing us to provide a truly unbiased and diversified approach to active money management.
Compliance - Census Completion FAQs
Do I have to include employees on my census that are not eligible to (or do not elect to) participate in the plan?
In order for our recordkeeping system to accurately calculate vesting and eligibility we must obtain census information on every employee that receives compensation for the plan year being tested. These employees are entered into our system and determined to be either eligible or ineligible based on the plans eligibility requirements and entry dates and are tested accordingly. The IRS requires us to test employees even if they are eligible but do not wish to participate in the retirement plan.
Once we have the employees in our recordkeeping system, they will appear on the census that we provide to you for the next plan year and only their compensation, hours worked and rehire or termination date (if applicable) will need to be updated each year.
What should I enter in the compensation column?
There are various definitions of compensation so please reference your plan's adoption agreement (#9-Compensation) to know for certain how compensation in your plan is defined.
In the gross compensation column, you should report compensation paid during the entire plan year including pre-tax salary deferrals and IRS Code Section 125 deferrals (e.g., cafeteria plan, flexible spending account or premium plan only). Any employee that was paid at any time during the plan year should be included in the census.
If your plan elects to use portion compensation to allocate contributions, this can be entered in one of the Alt Comp columns to the right. Please refer to the next question to learn more about portion compensation.
If your definition of compensation excludes some facet of compensation (ex. bonus, overtime, etc.) you will provide gross compensation in the Gross Compensation column and then in a separate Alt Comp column you should enter gross compensation less the amount of compensation that is excluded. If your plan excludes more than one facet of compensation like bonus and overtime, you can subtract the total of both from gross and enter it in one of the alt comp columns. Enter a description in the lines above the Alt Comp columns describing the type(s) of comp that was excluded.
To check to see if your plan excludes any compensation, look in your plan's adoption agreement (#11-Excluded Compensation).
What is portion compensation?
Since not all plans have this provision in their plan, you will want to check your Adoption Agreement (#10-Pre Entry/Post-Severance Compensation). If you have elected "plan year," you will not need to provide portion compensation. If "participating compensation" is checked, for employees that become eligible for the plan during the plan year being tested, you will need to provide both gross compensation and portion compensation.
Portion compensation is compensation paid from the newly eligible employee's entry date (whether they decide to defer or not). For example, if an employee was hired on 4/23/16 and is eligible on 7/1/2016, you should enter compensation paid from 4/23/2016-12/31/2016 in the gross compensation column. In an Alt Comp field, you should indicate the employee's portion compensation paid from 7/1/2016-12/31/2016. If the employee, in this example, is eligible to enter the plan on 7/1/2016 but decides to wait and enters at the next plan entry date of 10/1/2016, portion compensation would still need to be reported from 7/1/2016.
Portion compensation can be used for various tests and is often used to calculate annual allocations if the document provides for this.
How do I report a rehired employee?
Enter the original date of hire on the census in the date of hire column. If the employee was terminated and then rehired, enter the first date of termination in the date of termination column and then note the rehire date in the rehire column. If there was more than one rehire, you can enter additional dates to the right of the last column.
If an individual who worked for you through a leasing organization is hired as a "regular" or common law employee, the service that individual performned for you through the leasing organization counts when determining eligibiliy and vesting. Therefore, you would need to count service from the date the individual started working for you through the leasing organization to determine when he/she satisfied the eligibility under the plan.
If it is easier to enter actual hours worked, can I do that?
Yes. If you submit the number of hours worked per payroll, we will accumulate them for each employee and report them on the census download that you receive. If no hours were submitted, a zero will appear in the hours column.
For testing purposes, if you prefer to use the codes, we need to know if an employee has worked less than 500 hours (code will be 1), more than 500 hours but less than 1000 hours (code will be 501) or 1000 hours or more in the plan year (code will be 1000).
In order for vesting to accrue properly, it is imperative that you check that the right code is indicated for each employee or indicate actual hours on our census spreadsheet. Either way is fine as long as each employee's hours are accurate.
How long will it take American Trust to complete my testing?
Every effort is made to complete testing as soon as possible, so that annual contributions can be calculated and corrective distributions processed (if necessary). Please note that in order for American Trust to begin your testing, both the completed census file and Information Request Form must be received. Incorrect and/or incomplete census data will slow the testing process.
How do I complete my Census Completion Form?
Compliance - Form 5500 FAQs
Am I required to file a Form 5500/5500SF?
Any employer that maintains a qualified retirement plan is required to file an annual Form 5500. Qualified retirement plans include defined benefit, profit sharing, money purchase, and 401(k) plans. Even if a plan has terminated, an employer is required to file a form until all plan assets have been paid out to participants.
Can I paper file the Form 5500/5500SF?
No, effective January 1, 2010 the Department of Labor (DOL) requires all retirement and welfare plans to file their annual Form 5500 reports electronically – with the exception of owner only plans that file Form 5500-EZ. The DOL will not accept mailed paper copy forms.
How do I know when the form is ready to be signed and efiled?
You will receive an email from American Trust stating your Form 5500/5500SF is available. You will be directed to the FT Williams website and instructions will be provided for you to retrieve and efile the Form 5500.
Do I need to complete any questions asked on the Form 5500/5500SF?
No, American Trust provides you with a signature ready form. You as the plan sponsor are responsible for efiling the form through the FT Williams website.
What is a SAR?
Summary Annual Report (SAR) briefly contains information that is reported on the Form 5500/5500SF and informs participants and beneficiaries of the plan’s financial condition. It is required that all eligible participants receive a copy of the SAR within 9 months after the close of the plan year, or if an extension was filed, within 2 months after the close of the period for which the extension was granted. Eligible participants include terminated employees and beneficiaries with remaining balances in the plan.
What is a Form 8955-SSA?
This form mainly notifies the Social Security Administration (SSA) of separated participants who still have deferred vested benefits payable from a retirement plan. When a participant retires and applies for social security, the SSA informs participants they have money in a particular plan.
How is the Form 8955-SSA filed?
American Trust will efile this form on your behalf. You are able to view and print the form from the FT Williams website but because it contains participant social security numbers it is filed separately from the Form 5500/5500 SF as the 5500 is publicly disclosed on the EFAST2 website.
How do I obtain my signing credentials?
You will need to obtain signer credentials from the EFAST2 website at www.efast.dol.gov and click on “Register” and follow the detailed instructions provided.
What if I forgot or misplaced my signing credential PIN?
Go to the EFAST2 website and click on “Login”. After successfully logging in you may view your PIN and other registration information by selecting “User Profile.” This page will display your credentials.
When electronically signing the Form 5500/5500SF, select the “Would you like to save your PIN for future use” option. This will save your User ID and PIN to our system and will automatically populate in the signing fields for future filings.
I don’t remember my User ID. How can I retrieve it?
From the EFAST2 website select “Login” on the welcome screen. Then select "Forgot User ID" and enter the email address that you provided during registration. You will need to provide the answer to your challenge question to view your User ID.
I don’t remember my Password. How can I retrieve it?
If you have forgotten your password, or if your password is locked, from the EFAST2 website select “Login” on the welcome screen, then select "Forgot Password" on the login page. To use the “Forgot Password” option, you must enter a valid User ID or registered email address. You will also be prompted to enter the answer to your challenge question. If done successfully, you will be allowed to create a new password.
How do I know that the form has been filed successfully?
After the Electronic Signer has entered their DOL credentials and signed the 5500 you will see one of the following filing statuses:
-Accepted: the DOL has accepted the filing.
-Not Accepted: the DOL has not accepted the filing, due to the plan not meeting DOL required edit checks. The software should provide a list of the DOL errors. The filing is still considered filed but will need to be amended and re‐filed.
- Rejected: If certain fields are missing, the filing will be rejected. The filing does not need to be amended, correction will need to be made and then re‐filed.
What is the filing deadline?
The Form 5500/5500SF and any required schedules and attachments, must be filed by the last day of the 7th calendar month after the end of the plan year (not to exceed 12 months in length). If the deadline falls on a Saturday, Sunday, or Federal holiday the filing may be filed on the next day that is not a Saturday, Sunday, or Federal holiday.
What is the late filing penalty?
Generally, if a Form 5500/5500SF is filed late you may be liable for civil penalties of up to $1,100 per day for each late return, along with IRS penalties of $25 per day (up to $15,000).
Who files an extension for the filing if needed?
American Trust will automatically prepare a Form 5558 to request a 2 ½ month extension where we are unable to prepare the Form 5500/5500SF due to circumstances of incomplete year end census data or pending plan audits. Extensions will also be filed upon request.
Does my plan need an audit?
If the plan qualifies as a large plan, it must file a Form 5500 with a Schedule H and have a limited scope audit done by a qualified independent public accountant.
Small plans are exempt from an audit requirement if 1) At least 95% of the plan's assets are qualifying plan assets; 2) The amount of the plan's fidelity bond is not less than 100% of the non-qualifying plan assets.