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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.
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Compliance and Regulatory Support
A retirement plan’s qualification for tax-exempt status is dependent upon its continued compliance with rules and
regulations set forth by the DOL, the Department of Treasury, the Internal Revenue Service, and other applicable
federal legislation. VALIC offers the service of assisting with the preparation of required regulatory reports and
performing the required nondiscrimination testing. Such services are addressed in the Plan Administration
Services Contract (PASC) and the Service Provider Agreements (SPA) that are submitted to VALIC as part of the
new business submission paperwork. For most plans, VALIC provides a standard set of plan services including
participant-level accounts and recordkeeping, and additional plan services are available to be selected by the plan
sponsor. Required regulatory reporting and plan testing are then performed by VALIC based on the services selected
and the information received from the plan sponsor. The services that VALIC provides have been categorized below
into compliance testing and regulatory reporting – Form5500.
Plan Document Services
VALIC provides plan document services to select clients who elect to utilize one of VALIC's various retirement plan
documents. Services consists of plan document design, drafting and on-going maintenance through the use of
amendments or restating the plan document.
Compliance Testing
VALIC performs compliance testing for the plan sponsor in accordance with the PASC or SPA. VALIC does not
perform any analysis of the data supplied by the plan sponsor; it relies exclusively upon information furnished by
the plan sponsor. Compliance testing may include nondiscrimination testing to confirm compliance with Internal
Revenue Code (IRC) 401(k); 401(m); 402(g); 410(b)(1)(A) and (B) minimum coverage; 415 annual additions;
and 416 top-heavy. Additional specialized testing services such as 401(a) (4) and average benefits testing may be
required and are performed by VALIC if requested by the plan sponsor.
The process is initiated once the plan sponsor’s year-end census information is received. The census information
is submitted in an electronic spreadsheet format via encrypted email on a secure Internet site. The data is then
uploaded into Actuarial Systems Corporation (ASC) compliance testing software for testing. A data inconsistency
report is run and forwarded to the plan sponsor for review and correction. Once data inconsistencies are resolved,
compliance testing begins. Throughout the various stages of compliance testing, an independent quality review
is performed. The results are documented in the Compliance Testing database. In the event a test fails, corrective
measures are discussed with the plan sponsor to resolve.
The PlanManager database is used to track plan sponsor census informationmailed and received dates; along with
testing milestones throughout the process and to validate regulatory deadlines. The PlanManager database is also
used to confirm test results are provided to the plan sponsor within regulatory deadlines.
Regulatory Reporting – Form 5500
VALIC prepares the Form5500 for the plan sponsor in accordance with the PASC or SPA. Financial and non-
financial data is extracted from the record keeping system and electronically imported or manually entered into the
SunGard Relius Government Forms web based portal, which is used to generate Form5500, along with the related
schedules and attachments. Form5500 information, including due dates is tracked in the PlanManager database.
The Form5500 prepared by VALIC is subject to an independent quality review.
Managers monitor 5500 deadlines through the PlanManager database for completion and due dates and provide
reports to their management. If a completed Form5500 cannot be electronically filed by the plan’s filing deadline,
VALICwill prepare Form5558 to extend the filing deadline with the IRS. Each Form5500 is electronically delivered
to the plan sponsor for review, signature, and electronic filing. SunGard Relius Government Forms software web
based portal provides email notifications to the plan sponsor when the Form5500 has been electronically filed.
III. Description of the VALIC Defined Contribution Plan Administration System