Current through Register Vol. 47, No. 6, September 18, 2024
(1)
Definitions. The following definitions shall apply when used
in this rule:
"Account" means any fixed annuity contract,
variable annuity contract, life insurance contract, documents evidencing mutual
funds, variable or guaranteed investments, or combination thereof provided for
in the plan.
"Beneficiary " means the person or estate
entitled to receive benefits under the plan following the death of the
participant.
"Director" means the director of the Iowa
department of administrative services.
"Employee " means a nontemporary (permanent
full-time or permanent part-time) employee of the employer, including full-time
elected officials and members of the general assembly, except employees of the
board of regents. For the purposes of enrollment, elected officials-elect and
members-elect of the general assembly shall be considered employees. Persons in
a joint employee relationship with the employer shall not be considered
employees eligible to participate in the plan.
"Employer " means the state of Iowa and any
other governmental employer that participates in the plan. Effective July 1,
2003, "employer" shall also include any governmental entity located within the
state of Iowa that enters into an agreement to allow its employees to
participate in the plan.
"Fiduciary" means a person or company that
manages money or property for another and that must exercise the standard of
care imposed by law or contract. For the purpose of these rules, "fiduciary"
means the trustee, the plan administrator, investment providers, and the
persons they designate to carry out or help carry out their duties or
responsibilities as fiduciaries under the plan.
"Governing body" means the executive council
of the state of Iowa.
"Group" means one or more employees.
"Investmentprovider " means a company
authorized under this rule to issue an account or administer the records of
such an account or accounts under the deferred compensation plan authorized by
Iowa Code sections
8A.402
and
509A.12.
"Normal retirement age " means 65 years of
age, unless an employee declares a different age pursuant to the plan's
catch-up provision. The age cannot be earlier than a year in which the employee
is eligible to receive retirement benefits without an age reduction penalty
from the employer-sponsored retirement plan.
"Participating employee"
or"participant" means any employee or former employee of the
employer who is currently deferring or who has previously deferred compensation
under the plan and who retains the right to benefits under the plan.
"Plan " means the state of Iowa employee
contribution plan for deferred compensation as authorized by Internal Revenue
Code Section 457 and Iowa Code sections
8A.434
and
509A.12.
"Plan administrator " means the designee of
the director who is authorized to administer the plan.
"Plan year " means a calendar year.
"Retirement investors' club" means the
voluntary retirement savings program for employees designed to increase
personal long-term savings. The program contains three plans, the 457 employee
contributions plan, the 401(a) employer contribution plan, and the 403(b)
tax-sheltered annuity plan.
"Trust" means the Iowa state employee
deferred compensation trust fund created in the state treasury and under the
control of the department.
"Trustee " means the director of the Iowa
department of administrative services.
(2)
Plan administration.
a.
Director's authorization.
The director is authorized by the governing body to administer a deferred
compensation program for eligible employees and to enter into contracts and
service agreements with deferred compensation investment providers for the
benefit of eligible employees and on behalf of the state of Iowa and other
eligible employers. This rule shall govern all investment options and
participant activity for the funds placed in the program.
b.
Plan modification. The
trustee may at any time amend, modify, or terminate the plan without the
consent of the participant (or any beneficiary thereof). The plan administrator
shall provide to participating employees and investment providers sufficient
notice of all amendments to the plan. No amendment shall deprive participants
of any of the benefits to which they are entitled under the plan
with respect to deferred amounts credited to their accounts
before the effective date of the amendment. If the plan is curtailed or
terminated, or the acceptance of additional deferred amounts is suspended
permanently, the plan administrator shall nonetheless be responsible for the
supervision of the payment of benefits resulting from amounts deferred before
the amendment, modification, or termination. Payment of benefits will be
deferred until the participant would otherwise have been entitled to a
distribution pursuant to the provisions of the plan.
c.
Location of account
documentation. The investment providers shall send the original
annuity policies, contracts or account forms to the plan administrator. Failure
to do so may result in termination of an investment provider's contract or
service agreement. The plan administrator shall keep all such original
documents. Participating employees may review their own documentation during
normal work hours at the department, but may not under any circumstances remove
the documentation from the premises.
d.
Not an employment
contract. Participation in this plan by an employee shall not be
construed to give a contract of employment to the participant or to alter or
amend an existing employment contract of the participant, nor shall
participation in this plan be construed as affording to the participant any
representation or guarantee regarding the participant's continued
employment.
e.
Tax relief
not guaranteed. The employer, trustee, and the investment providers do
not represent or guarantee that any particular federal or state of Iowa income,
payroll, personal property or other tax consequences will result because of the
participant's participation in the plan. The participant is obligated to
consult with the participant's own tax representative regarding all questions
of federal or state of Iowa income, payroll, personal property or other tax
consequences arising from participation in the plan.
f.
Investment agents. The
investment providers shall, subject to the trustee's consent, have the power to
appoint agents to act for the investment providers in the administration of
accounts according to the terms, conditions, and provisions of their contracts
or service agreements with the plan. Investment providers are responsible for
the conduct of their agents, including their adherence to the plan document and
administrative rules. The plan administrator may require an investment provider
to remove the authority of any agent to provide services to the plan or plan
participants when cause has been shown that the agent has violated these rules
or state or federal law or regulation related to the governance of the plan or
agent conduct.
g.
Plan
expenses. Expenses incurred by the plan administrator while
administering the plan, including fees and expenses approved by the plan
trustee for investment advisory, custodial, record-keeping, and other plan
administration and communication services, and any other reasonable and
necessary expenses or charges allocable to the plan that have been incurred for
the exclusive benefit of plan participants and that have been approved by the
plan trustee may be charged to the short-term interest that has accrued in the
deferred compensation trust fund created by Iowa Code section
8A.434
prior to the allocation of funds to a participant's chosen investment provider.
Such expenses may also be funded from fees assessed to eligible employers who
choose to offer the plan to their employees.
h.
Time periods. As
necessary or desirable to facilitate the proper administration of the plan and
consistent with the requirements of Section 457 of the Internal Revenue Code
(IRC), the plan administrator may modify the time periods during which a
participating employee or beneficiary is required to make any election under
the plan, and the time periods for processing these elections by the plan
administrator, including the making or amending of a deferral agreement, the
making or amending of investment provider selections, the election of
distribution commencement dates or distribution methods.
i.
Supplementary information and
procedures. Any explanatory brochures, pamphlets, or notices
distributed by the plan shall be distributed for information purposes only and
shall not override any provision of the plan or give any person any claim or
right not provided for under the plan. In the event any form or other document
used in administering the plan, including but not limited to enrollment forms
and marketing materials, conflicts with the terms of the plan, the terms of the
plan shall prevail.
j.
Binding plan. The plan, and any properly adopted amendments,
shall be binding on the parties and their respective heirs, administrators,
trustees, successors and assignees and on all beneficiaries of the
participant.
(3)Rights of participating
employees.
a.
Exclusive
benefit. The trustee shall hold the assets and income of the plan for
the exclusive benefit of the participating employee or the participating
employee's beneficiary.
b.
Creditors. The accounts of a participating employee under the
plan shall not be subject to creditors of the participating employee or the
participant's beneficiary and shall be exempt from execution, attachment, prior
assignment, or any other judicial relief, or order for the benefit of creditors
or other third persons.
c.
Designation of beneficiary. Upon enrollment, a participating
employee must designate a beneficiary or beneficiaries. An employee who has an
open account with an investment provider that is no longer able to open new
accounts may change the employee's designated beneficiary or beneficiaries at
any time thereafter by providing the plan administrator with written notice of
the change on the form prescribed by the plan administrator. An employee who
has an open account with an investment provider that is able to open new
accounts may change the employee's designated beneficiary or beneficiaries at
any time thereafter by completing the investment provider's beneficiary change
form.
d.
Assignment. Neither a participating employee, nor the
participating employee's beneficiary, nor any other designee shall have the
right to commute, sell, assign, transfer, borrow, alienate, use as collateral
or otherwise convey the right to receive any payments.
(4)Trust provisions.
a.
Investment options. The
trustee shall adopt various investment options for the investment of deferred
amounts by participating employees or their beneficiaries and shall monitor and
evaluate the appropriateness of the investment options offered by the
plan.
b.
Designation of
fiduciaries. The trustee, the plan administrator, and the persons they
designate to carry out or help carry out their duties or responsibilities are
fiduciaries under the plan. Each fiduciary has only those duties or
responsibilities specifically assigned to fiduciaries under the plan,
contractual relationship, trust, or as delegated to fiduciaries by another
fiduciary. Each fiduciary may assume that any direction, information, or action
of another fiduciary is proper and need not inquire into the propriety of any
such action, direction, or information. No fiduciary will be responsible for
the malfeasance, misfeasance, or nonfeasance of any other fiduciary, except
where the fiduciary participated in such conduct, or knew or should have known
of such conduct in the discharge of the fiduciary's duties under the plan and
did not take reasonable steps to compel the cofiduciary to redress the
wrong.
c.
Fiduciary
standards.
(1) All fiduciaries shall
discharge their duties with respect to the plan and trust solely in the
interest of the participating employees and their beneficiaries and in
accordance with Iowa Code section
633.123.
Such duties shall be discharged for the exclusive purpose of providing benefits
to the participating employees and beneficiaries and, if determined applicable,
defraying expenses of the plan.
(2)
The investment providers shall discharge their duties with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like aims and as
defined by applicable Iowa law.
d.
Trustee powers and
duties. The trustee may exercise all rights or privileges granted by
the provisions of the plan and trust and may agree to any alteration,
modification or amendment of the plan. The trustee may take any action
respecting the plan or the benefits provided under the plan that the trustee
deems necessary or advisable. Persons dealing with the trustee shall not be
required to inquire into the authority of the trustee with regard to any
dealing in connection with the plan. The trustee may employ persons, including
attorneys, auditors, investment advisors or agents, even if they are associated
with the trustee, to advise or assist, and may act without independent
investigation upon their recommendations. Instead of acting personally, the
trustee may employ one or more agents to perform any act of administration,
whether or not discretionary.
e.
Trust exemption. This trust is intended to be exempt from
taxation under IRC Section 5 01 (a) and is intended to comply with IRC Section
457(g). The trustee shall be empowered to submit or designate appropriate
agents to submit the plan and trust to the IRS for a determination of the
eligibility of the plan under IRC Section 457, and the exempt status of the
trust under IRC Section 501(a), if the trustee concludes that such a
determination is desirable.
f.
Held in trust. Notwithstanding any contrary provision of the
plan, in accordance with IRC Section 457(g), all amounts of compensation
deferred pursuant to the plan, all property and rights purchased with such
amounts, and all income attributable to such amounts, property, or rights shall
be held in trust for the exclusive benefit of participants and beneficiaries
under the plan. Any trust under the plan shall be established pursuant to a
written agreement that constitutes a valid trust under the law of the state of
Iowa. All plan assets shall be held under one or more of the following methods:
(1) Compensation deferred under the plan
shall be transferred to a trust established under the plan within a period that
is not longer than is reasonable for the proper administration of the accounts
of participants. To comply with this requirement, compensation deferred under
the plan shall be transferred to a trust established under the plan not later
than 15 business days after the end of the month in which the compensation
would otherwise have been paid to the employee.
(2) Notwithstanding any contrary provision of
the plan, including any annuity contract issued under the plan, in accordance
with IRC Section 457(g), compensation deferred pursuant to the plan, all
property and rights purchased with such amounts, and all income attributable to
such amounts, property, or rights shall be held in one or more annuity
contracts, as defined in IRC Section 401(g), issued by an insurance company
qualified to do business in the state where the contract was issued, for the
exclusive benefit of participants and beneficiaries under the plan or held in a
custodial account as described in subparagraph (3) below. For this purpose, the
term "annuity contract" does not include a life, health or accident, property,
casualty, or liability insurance contract. Amounts of compensation deferred
under the plan shall be transferred to an annuity contract described in IRC
Section 401(f) within a period that is not longer than is reasonable for the
proper administration of the accounts of participants. To comply with this
requirement, amounts of compensation deferred under the plan shall be
transferred to a contract described in IRC Section 401(f) not later than 15
business days after the end of the month in which the compensation would
otherwise have been paid to the employee.
(3) Notwithstanding any contrary provision of
the plan, in accordance with IRC Section 457(g), compensation deferred pursuant
to the plan, all property and rights purchased with such amounts, and all
income attributable to such amounts, property, or rights shall be held in one
or more custodial accounts for the exclusive benefit of participants and
beneficiaries under the plan or held in an annuity contract as described in
subparagraph (2) above. For purposes of this subparagraph, the custodian of any
custodial account created pursuant to the plan must be a bank, as described in
IRC Section 408(n), or a person who meets the nonbank trustee requirements of
Treasury Regulations Section 1.408 -2(e)(2) to (6) relating to the use of
nonbank trustees.
Amounts of compensation deferred under the plan shall be
transferred to a custodial account described in IRC Section 401(f) within a
period that is not longer than is reasonable for the proper administration of
the accounts of participants. To comply with this requirement, amounts of
compensation deferred under the plan shall be transferred to a custodial
account described in IRC Section 401(f) not later than 15 business days after
the end of the month in which the compensation would otherwise have been paid
to the employee.
(5)Absolute safeguards of the
employer, trustee, their employees, and agents.
a.
Questions of fact. The
trustee and the plan administrator are authorized to resolve any questions of
fact necessary to decide the participating employee's rights under the plan. An
appeal of a decision of the plan administrator shall be made to the trustee, or
the trustee's designee, who shall render a final decision on behalf of the
plan.
b.
Plan
construction. The trustee and the plan administrator are authorized to
construe the plan and to resolve any ambiguity in the plan and to apply
reasonable and fair procedures for the administration of the plan. An appeal of
a decision of the plan administrator shall be made to the trustee, or the
trustee's designee, within 30 days of the plan administrator's decision. The
trustee, or the trustee's designee, shall render a final decision on behalf of
the plan.
c.
No liability
for loss. The participating employee specifically agrees that the
employer, the plan, the trustee, the plan administrator, or any other employee
or agent of the employer shall not be liable for any loss sustained by the
participating employee or the participating employee's beneficiary for the
nonperformance of duties, negligence, or any other misconduct of the
above-named persons except that this paragraph shall not excuse malicious or
wanton misconduct.
d.
Payments suspended. The trustee, plan administrator,
investment providers, their employees and agents, if in doubt concerning the
correctness of their actions in making a payment of a benefit, may suspend the
payment until satisfied as to the correctness of the payment or the identity of
the person to receive the payment, or until the filing of an administrative
appeal under Iowa Code chapter 17A, and thereafter in any state court of
competent jurisdiction, a suit in such form as they consider appropriate for a
legal determination of the benefits to be paid and the persons to receive
them.
e.
Court
costs. The employer, the plan, the trustee, the plan administrator,
their employees and agents are hereby held harmless from all court costs and
all claims for the attorneys' fees arising from any action brought by the
participating employee, or any beneficiary thereof, under the plan or to
enforce their rights under the plan, including any amendments of the
plan.
(6)Eligibility. Except
employees of the board of regents, any nontemporary executive, judicial or
legislative branch employee, or employee of a governmental employer that enters
into an agreement to join the plan, who is regularly scheduled for 20 or more
hours of work per week or who has a fixed annual salary is eligible to defer
compensation under this rule. An elected official-elect and elected
members-elect of the general assembly are also eligible provided that
deductions meet the requirements set forth in the plan. Final determination on
eligibility shall rest with the plan administrator.
(7)Communications.
a.
Forms. All enrollments,
elections, designations, applications and other communications by or from an
employee, participant, beneficiary, or legal representative of any such person
regarding that person's rights under the plan shall be made in the form and
manner established by the plan administrator and shall be deemed to have been
made and delivered only upon actual receipt by the person designated to receive
such communication. The employer or the plan shall not be required to give
effect to any such communication that is not made on the prescribed form and in
the prescribed manner and that does not contain all information called for on
the prescribed form.
b.
Notices mailed. All notices, statements, reports, and other
communications from the plan to any employee, participant, beneficiary, or
legal representative of any such person shall be deemed to have been duly given
when delivered to, or when mailed by first-class mail to, such person at that
person's last mailing address appearing on the plan records.
(8)Disposition of funds
while employed.
a.
Unforeseeable emergency. A participating employee may request
that the plan administrator allow the withdrawal of some or all of the funds
held in the participating employee's account based on an unforeseeable
emergency. Forms must be completed and returned to the plan administrator for
review in order to consider a withdrawal request. The plan administrator shall
determine whether the participating employee's request meets the definition of
an unforeseeable emergency as provided for in federal regulations. In addition
to being extraordinary and unforeseeable, an unforeseeable emergency must not
be reimbursable:
(1) By insurance or
otherwise;
(2) By liquidation of
the participating employee's assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship; or
(3) By cessation of deferrals under the plan.
Upon the plan administrator's approval of an unforeseeable
emergency distribution, the participating employee will be required to stop
current deferrals for a period of no less than six months.
A participating employee who disagrees with the initial
denial of a request to withdraw funds on the basis of an unforeseeable
emergency may request that the trustee or the trustee's designee reconsider the
request by submitting additional written evidence of qualification or reasons
why the request for withdrawal of funds from the plan should be approved. All
such requests must be in writing and be received by the trustee, or the
trustee's designee, within 30 calendar days of the date of the initial denial.
Requests received after 30 days will be rejected as untimely, and the initial
denial shall become final agency action.
b.
Voluntary in-service
distribution. A participant who is an active employee of an eligible
employer shall receive a distribution of the total amount payable to the
participant under the plan if the following requirements are met:
(1) The total amount payable to the
participant under the plan does not exceed $5,000 (or the dollar limit under
IRC Section 411(a)(ll), if greater);
(2) The participant has not previously
received an in-service distribution of the total amount payable to the
participant under the plan;
(3) No
amount has been deferred under the plan with respect to the participant during
the two-year period ending on the date of the in-service distribution;
and
(4) The participant elects to
receive the distribution.
The plan administrator may also elect to distribute the
accumulated account value of a participant's account without consent, if the
above criteria are met.
This provision is available only once in the lifetime of the
participating employee. If funds are distributed under this provision, the
participating employee is not eligible under the plan to utilize this provision
at any other time in the future.
c.
Transfers under domestic relations
orders.
(1) To the extent required
under a final judgment, decree, or order (including approval of a property
settlement agreement) made pursuant to a state domestic relations law, any
portion of a participating employee's account may be paid or set aside for
payment to a spouse, former spouse, or child of the participating employee. The
plan will determine whether the judgment, decree, or order is valid and binding
on the plan and whether it is issued by a court or agency with jurisdiction
over the plan. The judgment, decree or order must specify which of the
participating employee's accounts are to be paid or set aside, the valuation
date of the accounts and, to the extent possible, the exact value of the
accounts. Where necessary to carry out the terms of such an order, a separate
account shall be established with respect to the spouse, former spouse, or
child who shall be entitled to choose investment providers in the same manner
as the participating employee. Unless otherwise subsequently suspended or
altered by federal law, all applicable taxes shall be withheld and paid from
this lump sum distribution. The provisions of this subparagraph shall not be
construed to authorize any amount to be distributed under the plan at a time or
in a form that is not permitted under IRC Section 457.
(2) A right to receive benefits under the
plan shall be reduced to the extent that any portion of a participating
employee's account has been paid or set aside for payment to a spouse, former
spouse, or child pursuant to these rules or to the extent that the employer or
the plan is otherwise subject to a binding judgment, decree, or order for the
attachment, garnishment, or execution of any portion of any account or of any
distributions therefrom. The participating employee shall be deemed to have
released the employer and the plan from any claim with respect to such amounts
in any case in which:
1. The department, the
retirement investors' club, or the plan has been served with legal process or
otherwise joined in a proceeding relating to such amounts,
2. The participating employee has been
notified of the pendency of such proceeding in the manner prescribed by the law
of the jurisdiction in which the proceeding is pending for service of process
or by mail from the employer or a plan representative to the participating
employee's last-known mailing address, and
3. The participating employee fails to obtain
an order of the court in the proceeding relieving the employer and the plan
from the obligation to comply with the judgment, decree, or order.
(3) The department, the retirement
investors' club or the plan shall not be obligated to incur any cost to defend
against or set aside any judgment, decree, or order relating to the division,
attachment, garnishment, or execution of the participating employee's account
or of any distribution therefrom.
(9)Investment providers.
a.
Participation. The
investment providers under the plan are authorized to offer new accounts and
investment products to employees only if awarded a contract or service
agreement through a competitive bid process. A list of active investment
providers shall be provided, upon request, to any employee or other interested
party. Inactive investment providers shall participate to the extent necessary
to fully discharge their duties under the applicable federal and state laws and
regulations, the plan, their service agreements or contracts with the employer,
and their investment accounts or contracts with participating
employees.
b.
Investment
products. Investment products shall be limited to those that have been
approved by the plan administrator. No new accounts shall be available to
employees for life insurance under the plan.
c.
Reports and consolidated
statements. The investment providers will provide various reports to
the plan administrator as well as consolidated statements, newsletters, and
performance reports to participants as specified in the service agreements or
contracts with investment providers.
d.
Dividends and interest.
The only dividend or interest options available on policies or funds are those
where the dividend or interest remains within the account to increase the value
of the account.
e.
Minimum
contract requirements. In addition to meeting selection requirements,
an investment provider must meet and maintain the requirements set forth in its
contract or service agreement with the state of Iowa.
f.
Removal from participation.
Failure to comply with the provisions of these rules, the investment provider
contract or service agreement with the employer, or the terms and conditions of
the investment provider account with the participating employee may result in
termination of an investment provider contract or service agreement, and all
rights therein shall be exercised by the employer.
(10)Marketing and education.
a.
Orientation and information
meetings. Employers may hold orientation and information meetings for
the benefit of their employees during normal work hours using materials
developed and approved by the plan administrator. Active investment providers
may make authorized presentations upon approval of individual agency or
department authorities during nonwork hours. There shall be no solicitation of
employees by investment providers at an employee's workplace during the
employee's working hours, except as authorized in writing by the plan
administrator.
b.
General
requirements for solicitation.
(1)
An active investment provider may solicit business from participants and
employees through representatives, the mail, or direct presentations.
(2) Active investment providers and
representatives may solicit business at an employer's work site only with the
prior permission of the agency director or other appropriate
authority.
(3) Investment providers
or representatives may not conduct any activity with respect to a registered
investment option unless the appropriate license has been obtained.
(4) An investment provider or representative
may not make a representation about an investment option that is contrary to
any attribute of the option or that is misleading with respect to the
option.
(5) An investment provider
or representative may not state, represent, or imply that its investment
options are endorsed or recommended by the plan administrator, the employing
agency, the state of Iowa, or an employee of the foregoing.
(6) An investment provider or representative
may not state, represent, or imply that its investment option is the only
option available under the plan.
c.
Disclosure.
(1) Enrollment. When soliciting business for
an investment product, an active investment provider or representative shall
provide each participating employee or eligible employee with a copy of the
approved disclosure for that option. If a variable annuity product has several
alternative investment choices, the participant must receive disclosures
concerning all investment choices. An active investment provider shall notify
the plan administrator in writing if the investment provider will be marketing
its investment options through representatives. The notification must contain a
complete identification of the representatives who will be marketing the
options. Every representative and agent who enrolls eligible employees in the
plan and is authorized by the investment provider to sign plan forms must be
included on this notification.
(2)
Disbursement methods and account values. When discussing distribution methods
for an investment option, investment providers or representatives shall
disclose to each participating employee or eligible employee all potential
distribution methods and the potential income derived from each method for that
option.
d.
Approval of a disclosure form.
(1) An investment provider shall complete and
submit to the plan administrator a disclosure form for each approved investment
product. If a variable annuity product has several investment choices, the plan
administrator must receive all disclosures related to those investment choices.
An investment provider shall complete a disclosure form on each investment
product that has participating employee funds (including those no longer
offered).
(2) If changes occur
during the plan year, any changes must be submitted to the plan administrator
for approval prior to their implementation. Disclosure forms will be updated
quarterly. Even if no changes occur, an investment provider shall resubmit its
disclosure form to the plan administrator for approval every year.
(3) If an investment provider or
representative materially misstates a required disclosure or fails to provide
disclosure, the plan administrator may sanction the investment provider or bind
the investment provider to the disclosure as stated on the form.
e.
Confidentiality. The plan administrator may provide to all
active investment providers any information that can be made available under
the department's rules. Notwithstanding any rule of the department to the
contrary, the plan administrator shall make available to all active investment
providers the names and home addresses of all state employees. The plan
administrator may assess reasonable costs to the active investment providers to
defray the expense of producing any requested information. All information
obtained under the plan shall be confidential and used exclusively for purposes
relating to the plan and as expressly contemplated by the service agreement or
contract entered into by the investment provider.
f.
Number of investment
providers. Only investment providers that are selected through a
competitive bid process, that are subsequently awarded a contract or service
agreement, and that are authorized to do business in the state of Iowa may sell
annuities, mutual funds or other approved products under the plan, and then
only if the investment providers agree to the terms, conditions, and provisions
of the contract or service agreement.
(11)Investment option
removal/replacement. The plan administrator may determine that an
investment option offered under the plan is no longer acceptable for inclusion
in the plan. If the plan administrator decides to remove an investment option
from the plan as the result of the option's failure to meet the established
evaluation criteria and according to the recommendations of consultants or
advisors, the option shall be removed or phased out of the plan. Employees
newly enrolling in the plan shall be informed in writing that investment
options that do not meet the evaluation criteria are not open to new
enrollments.
a.
Notice to
participant. Any participating employees already deferring to the
investment option being phased out shall be informed in writing that they need
to redirect future deferrals from this option to an alternative investment
option offered under the plan by notifying the investment provider, unless
otherwise directed, of their new investment choice.
b.
Automatic transfer. If
any participating employee has failed to move a remaining account balance from
the investment option being phased out, the plan administrator shall instruct
an investment provider to automatically move that participating employee's
account balance into another designated alternative investment option offered
under the plan.
c.
Reexamination. At any time during this process, the plan
administrator may reexamine the performance of the investment option being
phased out and the recommendations of consultants and advisors to determine if
continued inclusion of the investment option in the plan is
justified.
(12)Demutualization of investment
providers.
a.
Ballots. An investment provider that is a mutual company and
that provides any annuity product or life insurance product held under the plan
shall provide the plan administrator with a ballot(s) for official vote
registration. The ballot(s) shall be completed and returned to the company
according to the specified deadline in the instructions. The ballot(s) shall
include the owner's name, policy numbers of affected contracts, name of
annuitant or insured, number of shares anticipated, and the control number for
the group of shares.
b.
Policyholder booklet. The company shall provide the plan
administrator with a policyholder booklet, as well as instructions and guide
information, prior to or in conjunction with the delivery of the ballot(s).
Notices of progress, time frames and meetings will also be provided to the plan
administrator as such information becomes available.
c.
Method of compensation.
Compensation will be provided in cash according to the terms of the
demutualization plan. In the event that stocks are issued in lieu of cash, the
company shall provide a listing which includes participants' names, social
security numbers, policy numbers, and number of shares pro rata.
d.
Liquidation of stock. An
arrangement will be entered into between the plan administrator and a
stockbroker as soon as administratively possible in order to liquidate the
stock for cash. The broker shall retain commission fees according to the
arrangement entered into from the value obtained at the time of sale. The
employer will not realize a tax liability nor will the participating
employees.
e.
Deposit of
proceeds. The proceeds of the sale of the stock, less the broker
commission, and any dividends issued prior to the sale of the stock, shall be
made payable to the plan. Cash shall be deposited into the plan's trust fund
until payment instructions are received from the participant or the
participant's beneficiary.
