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excess deferrals from occurring. The process includes plan sponsor and participant
notifications through reports and emails. An additional reactive enforcement process is
designed to be a second IRC limits validation to prevent excess deferrals from occurring.
Each time a remittance file is received, an IRC limits projection is completed. If an over
contribution is detected, a contribution reduction or contribution stop will be included on the
contribution change feedback file for the corresponding payroll date. There is also a
reactive process to ensure that if the over contribution changes were not included in the next
remittance file, Retirement Manager will contact the plan administrator regarding the over
contribution amount.
8. Does your Firm prompt participants aged 50 or older about the catch-up provision
available to them?
Yes. VALIC financial advisors have the ability to download plan participant data from our
Contribution Limit Monitoring system that notifies them of not only the actual contribution
amount for each participant, but also each participant’s annual limit including his/her
expanded cap amounts and his/her age-based catch-up amounts. Advisors can then use
this information to reach out to participants to notify those who are eligible for catch-up
amounts and their total annual limit amount.
Retirement Manager does not notify the participant if they are eligible for the catch-up or
expanded cap contributions.
9. What correction procedures does your Firm employ should participants exceed IRS
limits? Or, if 415 limits are exceeded? Do you monitor compensation limits? Please
describe in detail.
VALIC takes a legally acceptable form of corrective action regarding excess contributions.
Upon authorization from the participant, VALIC provides refunds or limitations on deferrals
due to violations of any test.
The procedure for correcting excess deferrals and earnings thereon is determined by the
date that authorization to correct the excess deferral is received from the participant. If
VALIC receives authorization from the participant to correct an excess deferral prior to
December 31 of the year in which the deferral occurred, we will issue a check for the excess
deferral and earnings thereon. Earnings are determined on the excess deferral from the
effective date of the excess deferral up to the date the check is issued.
For excess deferrals discovered after the end of the plan year, such excesses are returned
to the participant in two checks, one for the excess deferral and one for the earnings. If the
earnings are $25 or less, one check is issued for the total amount.
Yes. These limits are monitored on a periodic basis and individuals are notified if an excess
occurs.
Retirement Manager provides an enforcement module designed to prevent excess deferrals
through a proactive process that systematically reduces and/or stops excess deferrals from
occurring. The process includes plan sponsor and participant notifications through reports