ASC Newsletter

In this issue #20-01

 Answers to ASC Clients’ COVID-19 Questions
 Keeping Business as Usual: The Power of ASC’s CRMWs
 The SECURE Act & ASC System Updates
 ASC Systems MEP / PEP Functionality


Answers to ASC Clients’ COVID-19 Questions

In response to our clients’ questions, we have created a COVID-19 Plan Document & Administration FAQs page. This page is continuously updated with your COVID-19 questions and ASC’s responses. We have answered questions such as “How does the CARES Act affect retirement plans?”, “Is the IRS extending 403(b) & DB plan restatement deadlines?”, to name a few. You can view the COVID-19 Plan Document & Administration FAQs page here.

Additionally, ASC’s FREE April 23rd webcast, “COVID-19/CARES Act Plan Document and Administration Issues”, is available for you to download and listen to, via recording. You will receive 1 CE Credit upon completion of the webcast and a short quiz. Register for the webcast here. The webcast Q&As are also available on the FAQ page.

With any additional comments or questions that you have, reach out to us anytime by contacting us via our Client Support Center or emailing us at

Keeping Business as Usual: The Power of ASC’s CRMWs

As an ASC client, you can eliminate the stress of organizing and tracking those crucial details related to recent law changes by using an ASC CRMW (Customer Relationship Management & Workflow Solution).

COVID-19 may present our world with uncertainty, but you can be certain that ASC has the integrated CRMW product to help navigate this continuously changing environment. ASC’s CRMW solutions, CATTS (Client & Task Management System) and PensionPal are designed to enable you to work as efficiently from home as in the office, enabling you to maintain the same productivity and security as in a central office. Both solutions are integrated with ASC’s DGEM (Document Generation & Management) document system, providing real-time data flow to the CRMWs.

Answers to your Popular Questions by CRMW Product

Hot Topics! CATTS Web-based CRM PensionPal Premise-based CRM
Checklist at your Fingertips • Banner Popups or Case Notes • Reminder Feature or Dashboard
COVID Distribution Tracking • Forms and Projects • Mail Merge and Workflow
COVID Loan Tracking • Forms and Projects • Mail Merge and Workflow
Amendments • DGEM Integration (automatic)
DGEM Integration (automatic) Plus other document vendors
Partial Plan Termination & Defined Benefit Plan Freeze • Add monitoring custom field • Add field to Report or Page
Forms & Notices Delivery • Mail Merge and Email • Email Template merge & blast feature

For detailed Hot Topic instructions:


PensionPal CARES Act Link

COVID-19 Plan Document & Administration FAQs

ASC is here for you. We want to enable you to run your business as usual using digital channels. If you would like more information regarding our robust CATTS or PensionPal systems and how they can work for you, please contact us at If you have questions about or want to learn other ways to allow your staff to work remotely with ASC products, please email and we will assist you. We wish you continued success, and we remain committed to providing you with highly efficient software and products during these trying times.

The SECURE Act & ASC System Updates

With the COVID-19 Pandemic and the enactment of the CARES Act, the SECURE Act may seem like a distant memory. However, not to us.

ASC’s Support, Development and ERISA attorney teams have been focused on gaining an understanding of the law and how ASC Systems will need to change in response to it. Currently, many of the SECURE Act’s provisions need additional guidance by the Treasury and the IRS. Even so, there are many areas of the legislation in which we are confident in the clarity of the law.

In the areas in which the law is clear, we have either already made changes to the ASC Systems or we have developed a plan for updating the ASC systems as required over the next few years in accordance with the roll out of the various provisions in the SECURE Act.

Below, you can see our list of the changes we anticipate based upon the current information available.

SECURE Act and ASC’S DC and DB Valuation Systems

PROVISION (Effective Date of Provision)

Required Minimum Distributions (after 12/31/2019)

Individuals turning 70.5 after 12/31/2019 will not be required to receive an RMD until they reach age 72. ASC’s RMD age identification programs (Reports-Other-70.5 and Utilities-DataChecks-EmployeeData) have been modified to identify those who have attained age 72 in addition to the current age 70.5 identification. This will allow users to identify who needs a distribution now, based on turning 70.5 in or before 2020, or who will be turning 72 and will need to be monitored for a future distribution. These reports are available in the menus for both DC and DB plans.

In addition, on the DC side, the calculation of the RMD amount has had a warning added with respect to the age of the participant (Calculations-Individual Employee – 70 ½ Minimums). If a participant that is not yet 72 by the Distribution Year entered is selected in the calculation, a message indicating the “participant isn’t required to commence required minimum distributions” will appear.

These changes were issued in a patch file in February, and will be formally distributed with our Spring System Release around June 1st. The Spring Release webcast scheduled for June 9 will provide additional information. At this point no changes to the actual distribution amount calculations have been made.

Unknown at this point are how the increase from age 70.5 to 72 will affect employees who are already receiving distributions, as well as those who are still working.

Automatic Enrollment Cap Safe Harbor (Plan Years beginning after 12/31/2019)

The escalation cap has been increased from 10% to 15% of pay. ASC’s Auto Enrollment Projection module (Reports – Studies and Proposals) already provides for flexibility in the cap, so no change will be made here.

Long Term Part-time Employee Eligibility (Plan Years beginning after 12/31/2020)

Employers must now provide entry in their 401(k) plans for those employees who have worked three consecutive years of service with more than 500 hours/year. These employees may be excluded from coverage, nondiscrimination and top heavy testing. For this provision, it is important to recognize that 12-month periods prior to this date do not have to be considered. As a result, the first time these employees may be eligible to enter the plan will be for Plan years beginning after 12/31/2023.

The DC systems currently track hire, term and rehire dates, as well as hours worked, in the History record. We are currently discussing how these employees will be tracked in the system, via a “Long term part-time” indicator, or by setting a particular Participant Status code. They will need to be able to be separated for allocations and testing. For now, users should continue to populate these fields annually so they may be properly accumulated in the History record.

There are many unanswered questions regarding this provision, such as how does this affect class exclusions, is it “once-in, always-in”. As these become clear, our programming approach will be chosen.

Multiple Employer Plans and Pooled Employer Plans (Plan years beginning after 12/31/2020)

This provision allows for unrelated employers to join a pooled plan. The history and details related to PEOs, Open MEPs, and Closed MEPs are more expansive than what can be covered here. For the ASC Valuation system, it is important to note that these plans, in whatever their form, can already be handled in the existing system. Users have been performing compliance testing on these plans for over a decade on ASC using either multiple locations within a single case, or as separate cases. The separate case setup allows more flexibility but requires more user input. As a result, it is normally paired with our SSP scripting automation product to gain efficiency. Please contact to discuss your PEP/MEP/PEO clients and the proper set up. There are many complexities with respect to these plans that may easily be written into a Plan Document for example, but not so easily administered.

DC Plan Participant Employee Statements (12 months after DOL issues interim final rules)

Benefit statements provided to participants in a DC plan will be required to include a lifetime income disclosure, including the monthly payment based on the account balance using both single and qualified joint and survivor annuities. This would need to be provided at least once in a 12 month period.

Modifications to ASC’s Employee Statements will be made once the rules, model disclosure and required assumptions are published.

Nondiscrimination relief for frozen DB plans (immediately)

For defined benefit plans closed to new entrants, the SECURE Act provides nondiscrimination testing relief for 401(a)(26) coverage testing, accrual testing relief for 401(a)(4) testing for the closed group, and Benefits, Rights and Features (BRF) testing relief for the closed participant class. The IRS has been offering limited nondiscrimination testing relief on a temporary basis for several years, but we expect formal guidance on the SECURE Act’s more expansive testing relief. ASC’s actuaries will continue to evaluate whether any reporting changes are required for this relief, but as of the time of this newsletter, no changes are expected.

Modification of PBGC Premiums for CSEC DB plans (immediately)

For defined benefit plans that satisfy the CSEC requirements (Cooperative and Small Employer Charity plans), the PBGC premiums for plan years beginning after 2018 are legislated as $19 per participant for the flat rate premium, and $9 for each $1,000 of unfunded vested benefits. These premium rates are not indexed. For plans using the PBGC Information Report in the ASC DB Val system, you may manually enter these flat rate and variable rate values in the Assumptions > PBGCPREM screen of Plan Specifications to have the report reflect these custom rates.

Special rules for Minimum Funding for Community Newspaper DB plans (plan years ending after December 31, 2018)

For defined benefit plans that satisfy the community newspaper plan sponsorship requirements, the interest rate is increased to 8%. The Funding>PPAFASMP screen can easily be modified to accommodate the 8% interest rate and the amortization period for funding shortfalls is extended from 7 years to 30 years. A workaround is required to accommodate the 30 year amortization period. Users who need this workaround should contact ASC Support for additional assistance.

Special rules for Minimum Funding for Community Newspaper DB plans (plan years ending after December 31, 2018)

For defined benefit plans that satisfy the community newspaper plan sponsorship requirements, the interest rate is increased to 8% and the amortization period for funding shortfalls is extended from 7 years to 30 years. The Funding>PPAFASMP screen can easily be modified to accommodate the 8% interest rate. A workaround is required to accommodate the 30 year amortization period. Users who need this workaround should contact for additional assistance.


Increased Late Fees for Failure to File form 5500s (forms after 12/31/2019)

The SECURE Act has increased the IRS penalty to $250 a day, up to a maximum of $150,000 per year. The IRS penalty for failure to file a Form 5500 before the SECURE Act was $25 a day, up to the maximum penalty of $15,000 per year. Also increasing under the Act is the penalty for failure to file the Form 8955-SSA. It has increased from $1 per participant multiplied the number of days the failure occurred with a maximum of $5,000 to $10 per participant multiplied the number of days the failure up to a maximum of $50,000. Note: the DOL still has the authority to assess penalties on all plans under Title I of ERISA. This is in addition to the IRS penalties. The new maximum civil penalty amount has increased to $2,194 per day. This penalty is adjusted for inflation for penalties assessed after January 23, 2019 with no maximum.

Due to the severity of these penalties, it is important to monitor 5500 statuses which can easily be done using the FIND function (without the need for a separate CRM). Users should also take advantage of the Automated Accelerated Email Reminder option to remind signers as the deadline approaches. These are features of the DGEM 5500 System that not only offer efficiencies but also help reduce risk and liability. At this point we do not expect to make any system changes specific to the SECURE ACT.

SECURE Act and ASC’S Plan Document Generation System (DGEM)

The SECURE Act and related American Miners Act will require an Interim Amendment. However guidance for many of the provisions is needed before an Interim Amendment can be drafted. In the interim, ASC will provide an Operational Checklist that can be used to document plan provision changes and the effective dates of those changes. The Operational Checklist will be available the end of March and will be similar to the one we previously provided for the Hardship Distribution rule changes.

Like the ASC Valuation system, DGEM is already able to accommodate Multiple Employer Plans. DGEM’s MEP processing provides robust functionality with the ability to generate a custom List of Modifications, SPD, Plan Summary and resolution for each adopting employer. See the DGEM User Guide (chapter 3) for more information.

ASC Systems MEP / PEP Functionality

Multiple-Employer Plan (MEP) – and now Pooled Employer Plans (PEP) – functionality is not new to ASC Software Systems. Many years ago we built MEP capability into our ASC DC/401k Valuation, Compliance Testing, Plan Document and 5500 Systems to accommodate our clients who are MEP/PEP providers.

A multiple-employer plan is a plan that is maintained by more than one employer. They can be ‘open’ or ‘closed’ and ASC’s System handles both.

Over the years, some of the largest MEP/PEP providers have chosen ASC Systems to administer their MEPs. Plan administrators have the ability, via the ASC System’s ‘user preferences’ to administer the plans the way they want. For example; participating employers of a MEP may be set up as individual cases within the ASC System and aggregated via Multiple Plan Maintenance Feature or the MEP can be set up as a single case; using the “locations” feature to identify the participating employers.

The MEP functionality utilizing the Locations Feature allows users to administer compliance testing, perform employer allocations and export 5500 data similar to running a single employer plan.

Users may also choose to set up individual cases for each participating employer in the MEP and administer testing and allocation within each plan case.

ASC’s DGEM Plan Document system offers robust MEP functionality including the ability to create, modify, update and restate documents from the master plan to the adopting employers. Plan provisions may be integrated to ASC’s valuation and Compliance Testing software.

ASC’s 5500 Systems allow the user to choose the “Multiple-employer” box on the 5500/SF which indicates the plan is (closed) MEP. When this box is marked, the user is required to attach a list of participating employers to the filing that reflects name of the participating employer, EIN and percentage of total contributions to the plan. A “Multiple ER plans participating Employer information” template is available for users on the Downloads page in DGEM.

Contacts to learn more about the MEP/PEP functionality within ASC.