Key Features of 401(k) Enginuity™

Introduction...

401k Enginuity is a completely online, highly automated, powerful, integrated, yet easy to use 401k setup, maintenance, administration and participation system accessible via any web browser and operating system platform.

• 401k Enginuity is presented to the public as the licensed Provider's — that is, under the Provider's name, with the Provider's corporate "look" and with the product name of the Provider's choosing. Please go to 401k Enginuity Customization for details.
• 401k Enginuity means the licensed Provider chooses the investments to be made available (proprietary or other), with 100% of any applicable investment fees/commissions going to the Provider (or other party so designated by the Provider).
• A licensed Provider can use 401k Enginuity to offer 401k clients completely web-based full-service or self-service 401k plan setup and administration — can even set the administrative scheme on a client-by-client basis all under a single Enginuity license (see Pricing for licensing details).
• 401k Enginuity plan administration is highly automated and customized to the exact plan being serviced, whether by Provider or business client, always making for quick and efficient 401k plan administration.
• 401k Enginunity's unique self-service approach to 401k administration uses a combination of automation plus the client's in-house personnel, essentially eliminating the high costs inherent in delivering 401ks to small companies. By significantly cutting the labor overhead component of the equation, Plan Providers have a powerful new channel for marketing their recordkeeping services and investments to this enormous (yet woefully under-served and under-developed) small plan market -- at fees small business owners can afford.
• 401k Enginuity self-service plan administration frees the licensed Provider from virtually all day-to-day administrative activity yet grants the Provider complete oversight and hands-on capabilities that can be used at any time. Most small business clients can handle their own 401k plan administration in less than 15 minutes a month with a little 401k Enginuity.
• 401k Enginuity costs less per eligible participant per year than competing enterprise-caliber 401k plan administration systems, and the unit cost per participant drops significantly as more capacity is licensed (please see Pricing for details). Providers can use 401k Enginuity to offer extremely affordable self-service 401k plans and/or competitively priced full-service 401k plans.

General System Features...

401k Enginuity is lightening fast and powerful, yet easy to interact with and use.

The core functions and capabilities are divided among three web portals (called Gateways): the Plan Sponsor Gateway, the Plan Participant Gateway and the Provider Gateway (which also allows access into the other Gateways as well as housing additional functions).

• User-defined data archival periods, wherein the licensed Provider and its clients can define the number of days they want 401k Enginuity to keep detailed information “live”. For example, if 90 days of information are kept “live”, the system automatically moves all prior activity to an archived database and posts starting totals (by fund, by source) to the “live” table to keep balances accurate.
• Archived data accessible through all user Gateways (please see online demos).
• Capacity for an unlimited number of user-defined money sources.
• Capacity for an unlimited number of investment options. Provider sets the master investments list, from which each client chooses its plan investment options, to which each participant chooses the investment(s) to direct his/her 401k contributions.
• Capacity for an unlimited number of records, including unlimited clients, unlimited plans for each client, and unlimited employees for each plan.
• A detailed audit trail of all changes made to the database, including the date and time a change was made, the user who entered the change, the effect of the change, and the type of change made.
• Automatic Provider notification via e-mail of any critical failures or system errors.
• Money acceptance by check, money order, wire transfer, or debit to the client's savings/checking account with Provider (if Provider is a financial institution).
• Adjustments calculated based on corrections.
• Provider discretion over posting or not posting adjustments.
• Integration capabilities with outside systems, including VRU, Scanner/Form Input, and more.
• Reconciliation tools to reconcile with the external trust system (SSI, for instance) and produce necessary variance/exception reports, wherever possible (subject to possible limitations within the trust system).
• Use of multiple trust accounts, with each client assigned to a predefined trust account, and each trust account reconciled individually.

Plan Setup and Maintenance...

401k Enginuity brings unprecedented speed and ease to initial set-up and ongoing maintenance of your clients' accounts because so much functionality is automated to the parameters chosen by the Provider for the overall system, then further narrowed by each client's choices for its particular 401k plan.

• The Plan Setup Wizard assists new clients in setting up their 401k plans. The Plan Setup Wizard explains all plan options (401k loans, investment options, employer contribution options and more) and records the client's decisions. Upon submission, the plan immediately appears within the Provider Gateway as "Pending" and awaiting review/approval.
• The system places only legally-imposed limits, if any, on the number of qualified plans a single employer can sponsor.
• The system places only legally-imposed limits, if any, on the number of employees that can enroll in any particular plan.
• Employees can participate in multiple plans simultaneously (within legal limits), 401k Enginuity monitors each employee's activity on a per-plan and cumulative basis.
• Self-service clients can add, update, and delete (more accurately, disable from participation) employee information themselves at any time through the Plan Sponsor Gateway.
• 401k Enginuity allows for flexible plan years, including short plan years, defined on a plan-by-plan basis.
• 401k Enginuity allows for flexible payroll cycles defined on a plan-by-plan basis.
• Plan Sponsors define the investments they want to make available to plan participants from the spectrum of investments the Provider has elected to offer, including proprietary investments and/or self-directed brokerage accounts..
• 401k Enginuity automatically identifies highly compensated employees based on published parameters, and integrates the information into its IRS compliance testing functions, which can be run — in seconds — as often as the user (whether self-service employer personnel or full-service Provider personnel) desires.
• 401k Enginuity has a predefined import filter for initial import and setup of employee records.
• The Plan Take Over & Conversion Wizard enables information to be imported during a plan take over/conversion. The Wizard allows for conversion of, among other categories: Balances by Source and Fund; Investment Elections; Year-to-Date Contributions (by Source); Year-to-Date Compensation; Year-to-Date Hours; Cumulative Contributions; Cumulative Distributions; Vested Percentage by Source; After-tax Basis (Frozen 88 and Post 88 Contributions); Hardship Basis (Frozen 88 and Post 88 Contributions); Life to Date Withdrawals and Hardship Basis Net of Withdrawals; Employee Biographical Information (including important dates); Pending Loans (all necessary parameters).
• 401k Enginuity gives Provider personnel the option of enabling and disabling features and options available to clients on a plan-by-plan basis. Disabled features are completely invisible to end-users rather than dimmed or otherwise left visible but nonfunctioning, so clients and their employees never feel cheated in seeing features that aren't available in their particular plan.
• 401k Enginuity means the licensed Provider can define and post fees on a per client, per plan, per transaction basis.

Contribution Processing...

401k Enginuity grants licensed Providers and their clients powerful yet easy-to-use contribution processing functions, including:

• Six predefined contribution columns (money sources), three predefined loan payment columns, and four predefined compensation columns (Profit Sharing Compensation, Matching Compensation, Testing Compensation, 404c Compensation) for regular processing.
• The ability to process “special allocations” at any time for any money source.
• A built-in “Matching Calculator” to automatically calculate any employer matching amounts based on Matching Compensation.
• A built-in “Profit Sharing Calculator” to automatically calculate any profit sharing amounts based on Profit Sharing Compensation.
• The ability to upload contribution, loan, and compensation data (using a predefined import file format) directly through the Web interface.
• Validation checking with automatic generation of an error/exception report.
• Flexible contribution system with the ability to do general contribution processing at any time.
• The ability to process negative amounts. (Negative amounts do not automatically generate disbursements.)
• Contribution processing automatically held until money is deposited into the trust account and validated through the asset custodian — with manual override provided to Provider Service Representatives.
• The ability to generate an export file to a trading platform and/or asset custodian system and to import and process trade confirmation information from that system.
• The storage of all necessary information for processed allocation records including PlanID, EmployeeID, FundID, TransactionID, LoanID (for loan related activity), NAV, Source, and As Of or Effective Date, Trade Date, Settlement Date, Amount, Shares, and Description.

Loan Processing...

401k Enginuity grants licensed Providers and their clients powerful yet easy-to-use, self-service and/or full-service loan processing functions:

• Unique, speedy, online 401k loan application that comfirms (by date and time) to the employer that the loan application has recieved and acknowledged all relevant information before loan is funded.
• 401k Enginuity allows for up to three concurrent, independent loans per participant per plan.
• 401k Enginuity automatically calculates available loan amounts.
• Loans are set up using the following key criteria: Principal amount, Duration, Interest Rate, and Payroll Frequency.
• Loan fees are included in APR calculation.
• Loan payments are automatically allocated between principal and interest portions.
• Normal repayments, negatives, partial payoffs, and complete payoffs can be accommodated.
• Loan re-amortization is made based on changes in duration or pay frequency.
• Loan delinquency reports are generated, with e-mail notifications sent to the Plan Administrator and employee/participant.

Distribution and Transfer Processing...

401k Enginuity grants licensed Providers and their clients powerful yet easy-to-use, self-service and/or full-service plan distribution and transfer processing functions:

• 401k Enginuity automatically calculates amounts available for distribution, taking into account pertinent factors such as outstanding loan amounts and vested account balances.
• Transfer and distributions are limited by Fund/Source activity.
• Spousal consent is determined by the Plan Administrator when approving distribution requests.
• 401k Enginuity generates an export file for the asset trading platform and check writing systems (if applicable), and imports and processes trade confirmation information from those systems.
• 401k Enginuity automatically processes residual distributions and transfers.
• 401k Enginuity splits distributions with a portion as cash and a portion as a rollover, with the ability for the rollover portion to be processed independently of the cash portion.
• 401k Enginuity automatically notifies the designated plan administrator (whether that person be employed by the Plan Sponsor or Enginuity licensed Provider) via e-mail of any hardship suspensions.
• 401k Enginuity allows transfers in the form of $ to $, % to %, $ to %, and realignments. Transfers can be performed at the source level or for an entire account.
• If an account is “Pending QDRO” the system displays a warning flag during distribution, transfer and loan activity.

Investment Income Processing...

401k Enginuity grants licensed Providers powerful yet easy-to-use investment income processing functions:

• The system stores daily accrual and net asset value information, and allocates income when actually received by the asset custodian.
• Dividends/income are allocated as of a basis date (ex-date) and at the individual plan level.
• 401k Enginuity automatically generates residual distributions and transfers for income posted after a full distribution or transfer.
• 401k Enginuity automatically corrects income allocations for individual participants based on corrections or adjustments made “as of” a prior date. If a correction reduces an actual income allocation, extra income is redistributed pro-rata to remaining shareholders.

Creating and Communicating Fees

401k Enginuity grants licensed Providers powerful yet easy-to-use, time-saving fees functions:

• There is a flexible fee system through which Providers bill their clients, with the ability for the licensed Provider to automatically post fees defined per plan and per transaction.
• Providers have the ability to export fee and transaction information (for use by its fee processing center, if any).
• Fee statements are automatically e-mailed to the Plan Sponsor after approved by Provider personnel.
• Providers have the ability to automatically generate distributions to cover client fees and charges based on an algorithm defined in 401k Enginuity's Provider customization options.

Additional Features

Recent Enhancements include:

• Plan Sponsor can initiate Corrective Distributions and QDROs.
• System-Level Participant Statement Processing (One-Click)-Prints out all statements across all plans.
• Allocation of Fees- system allocates fees by fund by source by participant.
• General System Failure Messages.
• Fixed Fee Extraction on a per participant per plan basis.
• User Interface password requires a minimum 8 digits.
• System accepts up to 6 separate loans per participant.
• Participant Statement includes a "Forfeiture" column
• All participant scan be vested at a pre-determined point in time.
• Participant Statements conform to all window envelopes.
• Participant Plan Summary includes vested balance for all participants.
• Default date fields to same as effective date when entered, default actual amounts to entered amounts.
• Realignments/Transfers/Elections: specific text and default elections to for Salary Deferral.
• Message to user that password has been reset.
• Report--Participant Contribution Summary. Total deferrals for all employees.
• Ability to block allocations from certain sources on Participant Gateway.
• Search capability available in income screen
• Global Report-Age 70 1/2.