Information to Assist You When Completing the Self-Directed Plan Document and Adoption Agreement - Profit Sharing Plans
The information below will help to provide you with information to use when completing our new GUST-approved plan document and adoption agreement for Self-Directed Profit Sharing plans.
Index:
- New Plan/Amended Plan
- Employer's Legal Name
- Plan Name/Plan Number
- Plan's Original Effective Date
- Yearly Date
- Fiscal Year
- Named Fiduciary
- Plan Administrator
- Predecessor Employer and Prior Employer
- Eligible Employee
- Highly Compensated Employee
- Entry Requirements
- Entry Date
- Pay
- Employer Contributions
- Contribution Requirements
- Contribution Modification
- Required Contributions
- Voluntary Contributions/Rollover Contributions
- Investments
- Vesting Percentage
- Vesting Service
- Equivalencies
- Withdrawal Benefits
- Retirement and Start of Benefits
- Forms of Distribution
- Adopting Employers/Signature Page
| Item A - GUST | ||
Use this procedure if you are completing the adoption agreement to comply with laws collectively known as GUST. |
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| If the plan's original effective date is.. | Then the Second Box is Checked and the Date of the Amendment is... | |
| Prior to January 1, 1997, | January 1, 1997. Example: Plan originally opened January 1, 1995. The amendment effective date is January 1, 1997 |
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| After January 1, 1997, | The plan's original effective date. Example: Plan originally opened January 1, 1999. The amendment effective date will be January 1, 1999. |
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| Item A - New / Transfer | ||
Use this procedure if you are opening a new plan or amending an existing plan that has already been amended for GUST. |
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| If the plan is... | Then... | |
| A new plan | The first box is checked | |
| Transferring to Principal Trust or is an existing Principal Trust plan already amended for GUST | The second box is checked and the amendment effective date must be completed. The amendment effective date is the date that the employer wants this amended adoption agreement to take effect. |
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| Item B - Employer's Name | ||
| We want the name of the company. | ||
| Item B - Tax I.D. | ||
| If the employer... | Then... | |
| Has a Federal Tax I.D. number | The employer must write this number in this item. | |
| Does not have a Federal Tax I.D. number |
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| Item C - Plan Name / Number | ||
Plan Name - We want the name of the plan. Plan Number - The employer must use 001 if this is the first plan; 002 if this is the second plan, etc. Transfer-in plans keep the same plan number. |
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| Item D - Plan's Original Effective Date | ||
| If the plan is... | Then the original effective date will be... | |
| New | Any date during the current plan year. Note: In most cases, the employer will use the first day of the plan year. Although the employer has until the last day of the plan year to open the plan, the employer can choose to make the plan effective retroactive to the first day of the plan year. |
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| Transferring to Principal Trust or being amended. | The date the plan was originally effective. The amendment effective date would be indicated in Item A. | |
| Item E - Yearly Date | ||
The employer writes the:
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| Item F - Fiscal Year | ||
| If the fiscal year is.. | Then.. | |
| The same as the year plan | Write the month and day of the last day of the plan year in this item. | |
| Not the same as the plan year | Write the month and day of the last day of the tax year in this item. | |
| Item G - Named Fiduciary | ||
| Nothing needs to be completed in Item G. When the employer signs the adoption agreement, the employer is agreeing with the statement that the employer is the named fiduciary. | ||
| Item H - Plan Administrator | ||
| Nothing needs to be completed in Item H. When the employer signs the adoption agreement, the employer is agreeing with the statement that the employer or someone appointed by the employer is the Plan Administrator. | ||
| Item I - Predecessor Employer / Prior Employer | ||
| The legal name of the Predecessor Employer or Prior Employer for which the current employer wants to give credit for service for entry and vesting in the plan is written in this section. | ||
| Item J - Eligible Employee | ||
| If the plan allows... | Then... | |
All of the below employees of the employer or an adopting employer, including those listed below, to participate in the plan upon meeting the plan's eligibility requirements as indicated in Item L of the adoption agreement:
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Box 1 is checked. | |
All of the below employees of the employer or an adopting employer to participate in the plan except:
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Box 2 is checked and
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| Item K - Highly Compensated Employee | ||
| This item does not require a selection by the employer. A highly compensated employee is defined in Section 1.02 of the document; an alternate definition of a highly compensated employee is not allowed. | ||
| Item L - Entry Service | ||
| If the plan... | Then... | And the... |
| Does not require any service to be completed for eligibility to participate in the plan | Box (1) (a) is checked. | |
| Requires years of service to be completed for eligibility to participate in the plan | Box (1) (b) (i) is checked and 1 or 2 years is written in this item. Caution: The vesting must be 100% if over one year is selected. |
Hours Method Item L (2) (b) (ii) is used to determine a year of service.
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| Item L - Age Requirement | ||
| If the plan... | Then... | |
| Does not require an employee to attain a specific age to be eligible to enter the plan | Box (a) is checked. | |
| Requires an employee to attain a specific age to be eligible to enter the plan | Box (b) is checked and an age not to exceed age 21 is written in this item. | |
| Item M - Entry Date | ||
| Nothing needs to be completed in Item M. When the employer signs the Adoption Agreement, the employer is agreeing with the statement that the entry dates will be semi-yearly. | ||
| Item N - Pay | ||
| Nothing needs to be completed in Item N. When the employer signs the adoption agreement, the employer agrees with the definition of pay as it is defined in our plan document and adoption agreement: Pay includes elective deferrals and is based on a plan year. | ||
| Item O - Contributions | ||
| Nothing needs to be completed in Item O (1). The profit sharing contribution is discretionary. An employer can fluctuate the contribution each year and choose 0% to 25%. The employer will allocate the contribution as of the last day of the plan year, but has up to and including the tax filing extension to make the contribution. | ||
| Item O - Forfeitures | ||
| If the employer... | Then forfeitures are... | |
| Does not check Box (2) (a) | Reallocated by the last day of the allocation (plan) year based on the participant's annual pay. | |
Checks Box (2) (a) Caution: Should not be selected if 100% vested immediately is selected in Item U (1). |
Used to reduce employer contributions. | |
| Item P - Contribution Requirements | ||
| If the employer... | Then contributions including forfeitures, if applicable, will be allocated to... | |
| Does not check Box (2) (a) | Any person who was an Active Member at any time during the allocation year. | |
Checks Box (2) (a) Caution: Should not be selected if 100% vested immediately is selected in Item U (1). |
Only persons who were Active Members at any time during the allocation year AND either
Caution: Active members at any time during the allocation year who retired, became totally disabled, or died will share in any allocation. |
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| Item Q - Limitation Year | ||
| The employer writes the month and day of the last month of the limitation year (usually the last day of the plan year) in the blank. | ||
| Item Q - Compensation | ||
| If the employer... | Then compensation means... | |
| Does not check Box (2)(a) or (b) | W-2 Pay | |
| Checks Box (2)(a) | 415 Safe-Harbor Compensation | |
| Checks Box (2)(b) | 3401 (a) Wages | |
| Item Q - Multiple Defined Contribution Plans | ||
| If the employer... | Then excess annual additions will be removed by following the procedures outlined... | |
| Does not check Box (3)(a) | In Section 3.06 of Principal Trust's plan document. | |
| Checks Box (3)(a) | On the attachment (Q)(3)(a). | |
| Item Q - Defined Benefit Plans | ||
| If the employer... | And/Or the effective date of this amendment is... | Then the employer... |
| Maintains or ever maintained a qualified defined benefit plan | Prior to January 1, 2000, | Describes the method used to satisfy annual additions on the attachment Q (4). |
| Maintains or ever maintained a qualified defined benefit plan | After January 1, 2000, | Does not have to complete Item Q (4). |
| Item Q - Top-Heavy Requirements | ||
| If the employer maintains... | Then the employer... | |
| Only one plan and there are key employees | Makes sure that each non-key employee receives a minimum top- heavy contribution. The percentage does not have to exceed the lesser of the largest percentage contributed to a key employee or 3%. | |
| Two or more defined contribution plans and there are key employees |
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| A defined benefit plan and there are key employees |
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| Item R - Contribution Requirements | ||
| Nothing needs to be completed in Item R. When the employer signs the adoption agreement, the employer is agreeing with the statement that participants are not required to make contributions to be eligible to participate in the plan. | ||
| Item S - Voluntary / Rollover Contributions | ||
Voluntary Contributions - Nothing needs to be completed in Item S (1). When the employer signs the adoption agreement, the employer is agreeing with the statement that voluntary contributions will not be allowed. |
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Rollover Contributions |
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| If the employer... | Then rollover contributions.. | |
| Does not check Box 2) a) | Will be allowed. | |
| Checks Box 2) a) | Will not be allowed. | |
| Item T - Investments | ||
| Nothing needs to be completed in Item T (1). When the employer signs the adoption agreement, the employer is agreeing that they will abide by the terms of the Principal Trust Company Trust Agreement. | ||
| Item T - Investment Direction | ||
| If the employer... | Then investments for the accounts will be chosen by the... | |
| Does not check Box 2 (a) | Participants. | |
| Checks Box 2 (a) | Employer. | |
| Item T - Loans | ||
| If the employer... | Then loans will... | |
| Does not check Box 3 (a) | Not be permitted. | |
| A defined benefit plan and there are key employees | Be permitted. | |
| Item T - Life Insurance | ||
| If the employer... | Then life insurance... | |
| Does not check Box (4) (a) | Life insurance is not allowed as an investment. | |
| Checks Box (4) (a) | Life insurance is allowed as an investment. | |
| Item U - Vesting Percentage | ||
| If the employer chooses... | Then the vesting schedule is... | |
| Option (1) | 100% immediate. Note: If 2 years of service for entry into the plan is chosen in Item L, the employer checks Box 1 for immediate vesting. |
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| Option (2) | 100% vesting after 3 years. | |
| Option (3) |
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| Option (4) |
Note: The employer can choose an accelerated vesting schedule that is less than 6 years. |
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| Item V - Vesting Service | ||
This item is used to describe:
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| If the plan does not count service for vesting before... | Then... | |
| The effective date of the plan | Box 2) is checked. | |
| An employee attains age 18 | Box 3) is checked. | |
| Item W - Equivalencies | ||
| Nothing needs to be completed in Item W. When the employer signs the adoption agreement, the employer is agreeing to base hours of service on hours the employee actually works or is entitled to be paid. | ||
| Item X - Withdrawal Benefits | ||
| Nothing needs to be completed in Item X. When the employer signs the adoption agreement, the employer agrees to withdrawal benefits outlined in this Item of the adoption agreement. | ||
| Item Y - Retirement and Start of Benefits | ||
| If the plan requires... | Then... | |
| Age as the only factor when determining NRA and that age is less than 65 | Box 1 (a) is checked and an age up to 65 is written in the space. | |
| Age and years of participation in the plan when determining NRA | Box 1 (b) is checked and an age up to 65 is written in the first blank and years up to 5 is written in the second blank. | |
| Item Z - Forms of Distribution | ||
| If the employer... | Then the forms of distribution will be... | |
| Does not check Box 1 (a) | Any form specified in Section 6.02. These forms include single lump-sum payments; payments based on single or joint life expectancy, installments, and various types of annuities. | |
| Checks Box 1 (a) | Single-lump sum and in-kind. | |
| Item AA - Adopting Employers / Signature Page | ||
| The names and participation dates of adopting employers are written in Item AA. The Employer writes the date on the top line, his name, then title on the last line of the signature page. | ||
