Distribute RS and 401(k) Plan SMMs by July 29

July 29 is the deadline to distribute the summary of material modifications (SMM) documents for your cooperative’s Retirement Security (RS) Plan and 401(k) Pension Plan. These SMMs were released on June 22 to:

• All co-ops that offer the 401(k) Plan, and
• Co-ops that offer the RS Plan with the optional death benefit feature.

If you haven’t yet done so, give the SMMs to plan participants and beneficiaries who are receiving or entitled to receive a future benefit. Download yours from the Retirement Plan Documents page of the Employee Benefits website. Active and disabled employees, retirees and beneficiaries must receive the SMMs by July 29. Give the SMM to newly hired employees within 90 days after the date they first become eligible to participate.

The SMMs describe changes made to the specifications documents for the 401(k) Plan and RS Plan. The contents of the SMMs are not intended to alter the provisions of your current adoption agreement and do not create new plan features for your co-op’s employees. For example, the second and fourth items in the 401(k) Plan SMM may not be relevant to your co-op. Your co-op may have opted out of the coronavirus special withdrawal provision or your co-op’s 401(k) Plan does not allow hardship withdrawals. The applicability of these two provisions can quickly be verified by reviewing your 401(k) Plan provisions.

The first and third provisions of the 401(k) Plan SMM apply to all participants. Effective January 1, 2021, a participant may take periodic withdrawals if, at the time of election, the participant’s account balance is at least $5,000. These periodic withdrawals can be taken by former participants as well as active participants who are eligible to quasi-retire or have reached age 70½ and previously quasi-retired. Also, for 2020, any participant or beneficiary who would have been required to take a required minimum distribution had the option to elect whether they wanted to take the distribution. 

The RS Plan’s SMM contained one change, so it was sent only to co-ops that elected the optional death benefit in its adoption agreement. This plan change specified that minor beneficiaries electing to receive their benefit as an annuity will receive their annuity payments for a period of ten years. 

Acknowledgement is required
If you’ve already distributed your documents, remember to acknowledge distribution. The Employee Benefits website shows all unacknowledged SPDs and SMMs in the section titled Documents Requiring Acknowledgement at the top of the Retirement Plan Documents page. Remember to keep a printed copy of the distribution acknowledgement confirmation page in your plan files.

If you have additional questions about the SMMs or how to distribute the SMMs, contact the retirement compliance team at 866.673.2299, option 7, or email us at pension.compliance@nreca.coop.