Welcome to DWC!

Often referred to as a third party administrator or TPA, DWC provides ongoing compliance and consulting services in tandem with top-tier recordkeepers and investment advisors from around the country to create a service approach that offers the convenience of a bundled arrangement and the expertise that comes from working with specialists.

This section provides an overview of the services provided by each member of your team. If at any time you do not know who to call, call DWC. We will respond quickly with your answer or contact your advisor or recordkeeper to answer your question.

DWC - The 401(k) Experts | Compliance Service Provider

DWC initially prepares the plan document, summary plan description and certain participant notices that may be required.

Each year when we receive your completed census and questionnaire, DWC prepares our Annual ERISA Compliance Review for the Plan, which includes the required compliance testing; and certain required government filings, which may include the Form 5500 and Form 8955-SSA.  Additional details are included in the Overview of Services section below.

In addition to the year-end compliance testing and government reporting, DWC also works with you throughout the year to address any questions that may arise.  We also review participant distribution requests to confirm they are compliant with the provisions of the Plan.  The participant distribution process is described in further detail in the Distribution Process section below.

Please contact DWC if you have any questions related to your plan document, plan design, compliance testing, or Form 5500.  If in doubt on who to call, please do not hesitate to contact us.

DWC is pleased to partner with the following firms to provide a solution to your retirement plan needs.

Recordkeeping Service Provider

The recordkeeper for your plan provides day-to-day participant recordkeeping administration. From a plan sponsor perspective, you will upload all contributions and loan repayments to your provider's recordkeeping system via their secure plan sponsor gateway. The gateway also allows the plan sponsor to edit and configure employee data and run customized plan level reports.

Your recordkeeper provides you and your participants with

important day-to-day inquiry and transactional plan access, including the following:

• Participant-level accounting
• Website for participants to view their accounts and manage their deferral and investment elections
• Participant Call Center to respond to participant questions
• Quarterly and on-demand participant statements
• Transaction processing (contributions, loans, distributions)

They are responsible for the set-up and/or conversion of the Plan on the recordkeeping system.  Upon completion of that process, they will have converted the participant accounts from your prior recordkeeper, ensuring the proper setup of account sources, vesting, loans, Roth accounting (if applicable), and investment options.

Investment Advisor

Your investment advisor is available to assist you with questions related to the Plan's investment menu. Initially, they will work with you to determine the investment menu and document the selection and monitoring criteria.  On an ongoing basis they can provide the following

services to the Plan and participants:

• Preparation and monitoring the investment menu to confirm that the investment menu continues to be appropriate for the Plan;
• Develop and implement an employee communication and education program; and
• Supporting plan fiduciaries in fulfilling their investment and communication plan-related duties.

Plan Document Services

The plan document is the foundation for the operation and management of the Plan.  Given its importance, DWC seeks to make the preparation process a collaborative one, generally following these steps:

	Summary of Plan Provisions ("SOPP"): DWC prepares the SOPP that compares current plan provisions to those proposed to be included in the restated documents (for existing plans) and highlights any differences or selections that may impose more complex or burdensome compliance requirements.
	SOPP Review Call: DWC offers to schedule a conference call among the appropriate parties to review the SOPP in detail, discuss any proposed modifications and answer questions. Though not strictly required to move forward in the process, DWC strongly recommends this call to ensure that all parties are of common understanding.
	Confirmation of Changes: If any changes are requested during the SOPP review call, DWC will follow up in writing (usually by e-mail) to request confirmation of those changes.
	Plan Document Preparation: DWC will proceed with preparation of the plan documents per the SOPP, including any confirmed changes, for delivery to and execution by the plan sponsor. Since plan documents are not considered implemented until they are fully executed, it is imperative that signatures be obtained by the dates specified at delivery.  In addition to the plan document itself, DWC also prepares a Summary Plan Description (“SPD”), IRS-required amendments, participant loan policy and other documents that may be required based on the Plan’s provisions.

For Plans that use a document prepared by DWC, we are also available to prepare plan amendments as requested or required by law.  There are strict timing requirements as to when certain amendments may be adopted, and DWC will help assess the appropriate timing as requests are made.

Year End Prep Report ("YEPR")

The YEPR is typically delivered in the fourth quarter of the year.  Its primary focus is to request the information necessary to perform all of the required compliance testing and calculations after the close of the year; however, it also includes certain required participant notices and year-end action items or reminders.  The YEPR includes a template for the employee census data as well as step-by-step instructions (with screen shots) for uploading the census file directly to DWC’s secure Portal.  On delivery of the YEPR, DWC follows up with a phone call to review the report, the upload process or any other action items that may be noted.

Annual ERISA Compliance Review ("AECR")

The AECR provides a detailed analysis of the Plan’s compliance status for the year, including the following:

Recognizing that many plan sponsors are focused on growing their businesses and have limited time to focus on the Plan, the AECR also includes an Executive Summary with concise action items to allow completion of year-end work in an accurate and timely fashion.

Government Reporting

• Form 5500 Plans are required to file Form 5500 with the Department of Labor within seven months following the close of the plan year, e.g. July 31^st for calendar year plans. However, this deadline can be extended by an additional 2 ½ months (to October 15^th for calendar year plans) by filing Form 5558 by the initial due date. DWC will prepare signature-ready forms for electronic filing. 
• Form 8955-SSA This form reports participants who terminated during the immediately preceding plan year and have remaining balances in the Plan. The information from this filing is used to update the records for the Social Security Administration so that retiring participants can be made aware of benefits that may be due them. For plans required to file this form, DWC will prepare it in signature-ready format for execution and filing.

Additional Consulting

Plan sponsors occasionally encounter situations that require additional research or consulting.  This could range from something as common as illustrating the cost or compliance of a new plan design to one of the following:

• Representation in IRS or DOL audits
• Review of impact of a company merger or acquisition
• Preparation of voluntary correction of an operational error

DWC has a long history of providing expert, in-depth consulting services to our clients, so we are able to assist with most plan-related situations that arise.  Our focus is on identifying solutions that keep the plan compliant yet acknowledge that they must be practical.  While consulting services are generally not included in the regular base fees, DWC makes every effort to minimize additional fees and to provide estimates before work begins.

Returning Phone Calls & Emails

It can be frustrating to leave a message for a “professional” service provider and not get a return call until weeks later.  For that reason, it is DWC’s policy that all calls and e-mails are returned within one business day.  If a consultant is out of the office, his/her e-mail auto-responder and voice mail greeting will be turned on and provide information for another team member you can contact in his/her absence.

DWC’s goal is to always provide expert responses as quickly as possible; however, retirement plans are governed by thousands of pages of complex laws and regulations.  As such, we might not be able to suggest a solution or answer a question on the initial return call.  We will assess each situation, discuss the urgency/complexity and agree upon a mutually acceptable time frame for completion.

Plan Documents & Amendments

DWC is typically able to prepare defined contribution plan documents within 10 business days of receipt of all information required to complete the project, and we are able to prepare plan amendments within 7 business days.  The required information may include copies of prior documents, confirmation of requested changes or projections that verify the compliance of a proposed new plan design.

The IRS imposes stricter requirements on amending safe harbor 401(k) plans or amending “traditional” 401(k) plans to add safe harbor features.  To ensure timely preparation of the necessary documentation and notices, DWC requires that all amendment/restatement requests involving safe harbor features be submitted no later than November 10^th of the year prior to the year the change is to be effective, e.g. November 10, 2014 for changes to be effective January 1, 2015.

AECR

For all plan sponsors who submit complete and accurate census files and questionnaires on or before February 8th, DWC will deliver the AECR by March 5th.  For sponsors who submit their data after that date, DWC will deliver the AECR within 30 business days of receipt. If the Plan requires ADP/ACP testing, DWC must receive the complete and accurate census and questionnaire no later than February 8th to ensure completion of the test and calculation of any corrective refunds in sufficient time for the recordkeeper to issue refunds by March 15th.

Form 5500

For plans with fewer than 100 participants on the first day of the plan year, DWC typically prepares the Form 5500 in conjunction with the AECR.  If you changed recordkeeping service providers during the plan year (any conversion other than your plan year-end), DWC will require the following information to prepare the Form 5500:

• Plan financial statement from the first day of the plan year (January 1^st for calendar year plans) through the deconversion date from the prior recordkeeper;
• For any assets not converted to the recordkeeper, plan financial statement from the conversion date through the end of the plan year (December 31^st for calendar year plans); and
• Copy of the Form 5500 filed for the immediately preceding year.

For larger plan filers, DWC will finalize the Form 5500 within 5 business days of receipt of the final report from the Plan’s Independent Qualified Public Accountant (“IQPA”), which includes audited financial statements.  It is not uncommon for the audit process to be completed after July 31^st; therefore, many large plans file Form 5558 to extend the Form 5500 filing deadline.

DWC typically prepares the Form 8955-SSA, if applicable, in conjunction with the Form 5500.

Other Projects

Since projects can vary significantly depending on the scope and complexity, DWC works with plan sponsors to assess the facts and circumstances and develop a mutually acceptable time frame for completion.  Some projects rely on outside parties that are beyond DWC’s or a plan sponsor’s control, e.g. the IRS in a voluntary correction filing, so DWC will make every effort to describe the process and set reasonable expectations.

Our Philosophy

DWC uses a fixed fee schedule approach with no asset-based fees. Our philosophy is to set that schedule to cover the services every plan requires and to only charge additional fees to those plans that require additional work. We do not offer all-inclusive pricing, because we do not believe in asking all our clients to subsidize the small percentage that need additional services.

As a result, our fee schedule is typically at the 50th percentile of all TPA fee schedules even without any revenue sharing offsets. The differentiator is that we are a premium service provider, whereas many other firms with similar fees are not.

Revenue Sharing & Offsets

Some recordkeeping service providers offer revenue sharing to consulting firm/TPAs.   If applicable, we use the revenue sharing to offset our fees, and will only accept it up to the amount of our annual invoices.

Payment Methods & Options

Initial invoices are emailed with payment options that include check, credit card or ACH from account of your choice.  The service agreement provides these options for future invoices:

• DWC will invoice Client directly on the last day of each Plan Year quarter. (This is the default option that shall apply if Client does not make an alternate election). On receipt of initial invoice, Client will have the option to setup automatic payments via credit card or ACH from bank account.
• Client can direct DWC to invoice the Recordkeeper named in the Schedule of Services: Authorized Representatives on the last day of each Plan Year quarter. Client authorizes the Recordkeeper to issue immediate payment to DWC upon receipt of the quarterly invoice from DWC.  Said payment shall be deducted first from the Plan’s forfeiture account, if any, and then from participant accounts, pro-rata on account balance as of the date such amount is deducted.

Avoiding Common Errors

Most plan errors can be avoided by ensuring there is a documented process for operating the plan, including enrolling participants into the plan and scheduling salary deferral deposits.  Additional information regarding these common errors can be found in our Knowledge Center.  We are happy to assist with reviewing and/or enhancing your plan operation procedures.  Please contact any member of your service team to review and discuss your procedures.

The DWC website is designed to help you access useful information and manage your Plan quickly and efficiently.  Several sections of the site are highlighted below.

DWC Portal (the "Portal")

All plan documents and compliance reports are posted to the DWC Portal, located on the website under the ‘Client Tools’ drop-down menu.  The Portal offers plan sponsors and their advisors on-demand access to the following:

• Plan documents
• Annual ERISA Compliance Reports
• Government filings
• Required annual notices
• Annual census upload and anniversary questionnaire completion

You can access the DWC Portal with the following steps:

1. Go to dwc401k.com.
2. Click on ‘Login’ at the top, right corner of the screen and select ‘Client Login.’
3. Click on ‘New User Setup’ and follow the steps to obtain a temporary password

Login with your email address and create a personalized password.  We’ve created a step-by-step How To Guide (available here), and we are also glad to provide a demonstration on request.

Knowledge Center

With the many, ever-changing rules that govern retirement plans, keeping up with the latest requirements can be challenging.  In addition to proactively communicating new developments, DWC also maintains an online collection of information that is available as a reference.  The Knowledge Center drop-down menu includes the following sections:

• Articles & Insights In-depth concept reviews, short articles and FAQs organized by topic for easy research and access. Start researching here.
• Downloadable Resource Library An ever-growing repository of free downloadable materials, including eBooks, guides, and on-demand webinars. 
• Question of the Week Our weekly 401(k) Q&A blog feed addressing common questions received by clients, delivered directly to you inbox on your preferred schedule. Do you have a question you need answered? Submit it here! 
• Other 401(k) Q&A Offerings In addition to our weekly posts we also publish real-time breaking news break downs of happenings in the industry as well as a special quarterly Correction of the Quarter posts and commentary from our partners. 

As the regulatory environment in which businesses operate becomes increasingly complex, the need to maintain thorough records of various activities becomes increasingly important.  Employee benefit plans are no exception.

Both the Internal Revenue Service (“IRS”) and Department of Labor (“DOL”) have rules that provide some basic guidance on record retention.  Both agencies impose these requirements directly on plan sponsors; so even though service providers may store certain records as a convenience, sponsors remain legally obligated to hold on to all relevant records.

IRS Statute of Limitations

Some record retention guidelines are derived from the time frame during which one of the agencies can conduct an audit of an employee benefit plan.  This is referred to as the statute of limitations.  Generally speaking, the IRS statute of limitations runs for a period of three years from the date Form 5500 is filed for a given year.  If extended, the Form 5500 must be filed no later than 9 ½ months following the close of a plan year.  For a calendar year 401(k) plan that files its 2013 Form 5500 on October 15, 2014, the statute of limitations remains open until October 15, 2017.

Anyone who has been through an IRS audit of their 401(k) plan can confirm that the information requested is quite extensive and covers the entire range of plan operations from plan document maintenance to properly enrolling new participants to withholding the appropriate taxes from distributions.

ERISA Record Retention Requirements

ERISA also includes provisions that focus on record retention.  One such provision requires that anyone filing an employee benefit plan report such as Form 5500 must maintain sufficient records to support all information included on the report for at least 6 years from the date the report is filed.  Using the same assumptions described above, records to support all data on the 2011 Form 5500 must be retained until October 15, 2018 - 7 years and 9 ½ months from the start of the 2011 plan year.

Another provision imposes an additional obligation to maintain all records necessary to determine benefits that are or may become due to each employee.  In 1980, the DOL issued proposed regulations interpreting this section to mean that records must be retained “as long as a possibility exists that they might be relevant to a determination of the benefit entitlements of a participant or beneficiary.”

The need to reference historical records to determine benefits can be triggered by issues extraneous to the plan.  Employment disputes are a prime example.  The infamous court case involving Microsoft’s misclassification of employees as independent contractors arose from a 1989/90 IRS payroll-tax audit of the company.  Once it was determined these workers were employees, the question of entitlement to benefits quickly followed.  It was not until 1999 that the Ninth Circuit Court of Appeals settled the dispute and awarded back benefits to the misclassified workers.  This case illustrates how a payroll-tax issue expanded to require review of records more than 10 years old to determine benefits.

Consider Electronic Storage

Physical storage space can be expensive; so many plan sponsors have turned to electronic storage for some or all of their plan records.  While there are no absolute restrictions on maintaining electronic records, there are some practicalities to consider.

Records must be easily accessible.  Unreasonable delays in retrieving information can provoke an already disgruntled former employee to take the next step and call their attorney.  If the dispute is already being litigated, delays can have a negative impact on the proceedings.  Security is also very important.  Plan records include everything an identify thief needs; therefore, electronic storage must be secure.

Storage media have changed significantly in only the last 15 years (from magnetic tape to the thumb drive), and data encryption has also advanced at lightning speed.  Just because plan records are securely backed-up using the “current” technology does not mean out-of-sight-out-of-mind.  As there are advancements in technology, record retention policies should provide for the occasional migration to more current systems to preserve the integrity and security of the data.

Depending on specific plan provisions, retirement plan sponsors may be required to provide a variety of notices to participants.  These may include a safe harbor notice or a qualified default investment alternative (“QDIA”) notice.  Some notices are required when certain transactions are initiated such as the Special Tax Notice at time of distribution.  Others such as the Summary Plan Description (“SPD”) are required for all qualified plans.

Delivery Methods

Hard Copy Distribution

Providing hard copies of notices is an acceptable means of distribution.  This could include handing out copies at a company meeting or mailing to a participant’s last known address.

Electronic Distribution

Electronic distribution is permitted as long as the media being used is provided by the plan sponsor and participants are required to access that media as part of their jobs.  A company-provided e-mail address that participants are required to check is one example.  For situations that do not meet these requirements, there are complicated steps participants can take to show their consent to receive electronic disclosure.  As with hard copy distribution, simply posting a notice to an electronic bulletin board or providing public kiosks does not constitute actual notice delivery.

Combination

The above options may be combined so that some participants receive electronic notices and others receive hard copies.

Regardless of the method elected, it must be designed to ensure actual receipt by all participants.  For example, if certain notices are to be distributed at a company meeting, alternative arrangements should be made to ensure delivery to those not in attendance.

Timing

The type of notice will determine when and how often it must be provided.  For example, the Summary Annual Report/Funding Notice must be provided each year within two months following the deadline for filing Form 5500, while safe harbor 401(k) plans must provide notice to participants each year between 30 and 90 days prior to the start of the year.  The Compliance Calendar in Section 10 lists the deadlines for some of the more common notices.  DWC is able to assist in determining what additional notices may be required, if any, and when they are due.

The Plan is required to obtain a fidelity bond for every person who handles funds or other property of the plan.  A person will be deemed to be “handling” funds whenever his or her duties or activities establish a risk that the funds could be lost in the event of fraud or dishonesty on the part of such person.  The fidelity bond protects the Plan from losses due to misuse or misappropriation of assets.

The minimum required coverage is the lesser of $1,000 or 10% of Plan assets up to a maximum bond amount of $500,000.  For this purpose, Plan assets are measured as of the first day of the Plan year.  The amount of the bond is required to be reported annually on Form 5500.

If the fidelity bond is part of a global coverage package, make sure the portion that is intended to cover the plan lists the plan as the named insured and there are no deductibles.

Participant Contributions (Elective Deferrals and Loan Payments)

Department of Labor (“DOL”) regulations indicate that participant contributions become assets of the plan as soon as they can reasonably be segregated from company assets, but no later than the 15^th business day of the month following withholding.  Since companies cannot hold plan assets, this means that all participant contributions must be deposited within this time frame.

While some of have focused on the “15 business day” part of the rule, DOL has indicated that this is not meant to be a safety net, and their enforcement initiatives routinely hold companies to a deadline of 3 to 5 calendar days following each pay period.  In an attempt to clarify the deadlines, DOL published additional guidance indicating that for small plans (generally those with fewer than 100 participants), deposits will be considered timely if made no later than 7 business days following payroll.  All large plans and small plans that deposit beyond this safe-harbor time frame are subject to the general rule requiring deposit as soon as possible.

In the event of a late deposit, corrective action should be taken immediately.  This includes ensuring that all deposits are caught up, making additional contributions to the plan on behalf of the affected participants to compensate them for lost investment earnings and, in many cases, filing Form 5330 with the IRS and paying an excise tax.  Plan sponsors may also wish to consider requesting DOL approval of the correction via the Voluntary Fiduciary Correction Program.  Late deposits must be reported on Form 5500 for the year of occurrence and each year, thereafter, until the delinquency is fully corrected.  For more information, please visit the FAQ on our website here.

Employer Contributions (Match and Nonelective)

The deadline for depositing employer contributions depends on the type of contribution and certain plan provisions.  Some information is provided below, and a more detailed FAQ is available on our website here.

Tax Deductibility

In order to deduct company contributions for a given year, they must be deposited no later than the deadline (with extensions) for filing the company tax return.  Contributions deposited beyond that deadline may be deductible in the subsequent tax year.

Safe Harbor 401(k) Plans

Employer contributions that satisfy the safe harbor 401(k) plan rules have several specific deadlines.  Notwithstanding the deduction timing noted above, safe harbor contributions must be deposited no later than the end of the year following the year to which they relate.  In the case of safe harbor matching contributions that are calculated on a basis other than annually (each pay period, monthly, etc.), the deposit deadline is the end of the quarter following the quarter to which the contributions relate.  Failure to timely deposit safe harbor contributions can subject the plan sponsor to potentially significant penalties.

Following is a list of many of the annual action items and deadlines that relate to most qualified retirement plans.  The dates listed apply are for plans that operate on a calendar year; however, for deadlines that shift for plans that operate on a fiscal year, the criteria for determining the deadlines are included.  Please note that this list is for informational purposes only and is not intended to be comprehensive.

The purpose of this section is to review the recordkeeper's distribution and loan process (paper and online) with an emphasis on ensuring all distributions and loans are processed accurately and timely.  The following details all roles and responsibilities related to the two distribution options, emphasizing key quality controls.

The TPA review process for all distributions and loans ensures the accuracy of the following items:

• Vesting percentage
• Eligibility for distribution/loan (based on the terms of the plan document)
• Plan sponsor and participant signature

Paper Process for Distributions

The step-by-step process is as follows:

Online Process for Distributions

The step-by-step process is as follows:

If you have any questions or need additional assistance with the distribution process, please contact any member of your service team.