227 / 499
This report is intended for use by the management of the Variable Annuity Life Insurance Company ("VALIC") and its subsidiaries.
VALIC Retirement Services Company ("VRSCO") and VALIC Financial Advisors, Inc. ("VFA"), its user entities, and the independent
auditors of its user entities, and is not intended and should not be used by anyone other than these specified parties.
Back to TOCClick
VALIC
.com 20
Description of transaction processing
Note: Parenthetical references are included in the narrative as a cross-reference to the applicable control activities
included in Section IV of this report.
Contract/Plan Administration
The annuity (plan sponsor and participant, where applicable to a plan) and group mutual fund lines of business
covered under this report provide for investment and participant account record keeping, including contribution
allocations to and disbursements from participant accounts. VALIC products offer investment choices that include
fixed interest, variable annuity contracts, mutual funds offered through selling agreements, and a self-directed
brokerage account fromCharles Schwab. Many of the VALIC plan sponsors with defined contribution plans are
covered under the Employee Retirement Income Security Act of 1974 (ERISA). VALIC also services plan sponsors
who can claim exemption from ERISA requirements (e.g., churches, governmental entities, etc.).
Plan Setup
When a plan sponsor contracts withVALIC for retirement plan services, several documents are required for
VALIC to establish the plan and open it for participants’ investment into the available products. These documents
generally describe the products and services offered by VALIC and/or the responsibilities among the parties. Special
circumstances exist where the requirement of one or more of the above documents is waived for business reasons.
Thesewaivers are rare and noted in either the underwriting section of the CaseDevelopment database and/or
documented in the planmaster file.
VALIC is responsible for confirming that new plans are accurately established on the appropriate record keeping
system and are supported by appropriate legal and administrative documents from the plan sponsor. The plan
sponsor annuity and plan sponsor mutual fund plan setups are reviewed to ensure standard plan documentation
is completed by the plan sponsor prior to the first payroll contribution processing date. Missing documentation
for the plan setup request is gathered through contact with the VALIC advisor or plan sponsor. Annuity and group
mutual fund plan setup requests are completed by the plan’s first payroll contribution processing date. The record
keeping system assigns the record keeping system identification number as VALIC sets up the new plan, and loads
the product in the record keeping system in accordance with the information received from the plan sponsor. An
independent quality review is performed for new plan setups to ensure the plan documentation and data input
agree
(1.1)
. VALIC contacts plan sponsor’s HR or Payroll Department or the third-party administrator (TPA) that
is used by the plan sponsor to begin the payroll contribution processing. The plan sponsor receives a copy of the
associated contracts (which may include product contracts and a service contract) fromVALIC.
New participant accounts are established on the record keeping system from the information that is included in
the application or enrollment form for annuity or mutual fund business. Applications for enrollments are reviewed
for in good order processing prior to establishing new participant accounts on the record keeping systems
(1.2)
.
An independent quality review is performed on a minimum of 10% of enrollments
(1.3)
. Management monitors
the status of new accounts on an ongoing basis via AWD's processing queues and reports. Monthly production
reports are reviewed to analyze average time outstanding for account setups for adherence to established
processing standards. An individual contract or contract certificates are then issued for each participant in an
individual annuity or allocated (applying state insurance definitions) group.
III. Description of the VALIC Defined Contribution Plan Administration System