Updates for CPA/Attorney/Plan Sponsor

Choosing the right retirement plan for your company can be time-consuming and often it is difficult to find the time to research the right plan. Therefore, you may have your CPA and/or attorney sit down with you before you choose a retirement plan. He or she can advise you on legal requirements for your plan and assist you in making a decision. They should take a look at the information below to get a sense of how NADART handles various Internal Revenue Service and Department of Labor regulations.

Investment Policy Statement

Our Investment Policy Statement (pdf) was updated in January 2008. Policy guidelines will be updated from time to time by the Board of Directors and Cardinal Bank. Specific investment goals included in this document are reviewed at least annually and, when appropriate, new goals and standards will be adopted.

The NADART Report

The 2007 NADART Report (pdf) contains information on how the funds in the plan performed during 2007 as well as what NADART accomplished during that year and what we hope to accomplish in the upcoming year. The 2006 NADART Report (pdf) and the 2005 NADART Report (pdf) are also available for review.

Form 5500

Each year, the Department of Labor and IRS require qualified benefit plans to file Form 5500 “Annual Return/Report of Employee Benefit Plan” seven months after the close of each plan year. NADART will prepare this document for its plan sponsors and submit it electronically to the Department of Labor processing center.

  • Each spring, NADART provides plan sponsors with a Plan Census for completion. The completed questionnaires are used by NADART in preparing the filing.
  • For plans with less than 100 participants, the cost of filing is included in the quarterly administration fee. For plans with more than 100 participants, an independent audit is required and an additional audit preparation fee is charged. For plans that require an independent auditor, NADART contracts with a major accounting firm to conduct audits in the NADART offices for plans or the plan sponsor may contract with their own independent auditor if they wish.

Compliance Testing

Every year two types of tests are done on NADART plans to make sure they don’t unfairly favor Highly Compensated Employees. The tests, the Contribution Nondiscrimination Test and Top Heavy Test are required by the Internal Revenue Service to keep the plan qualified. NADART performs these tests as part of its services and the fees are included in the cost of the plan.

Control Groups and Affiliated Service Groups

With Control Groups and Affiliated Service Groups, all employees are treated as employed by a single employer for NADART’s purposes. The retirement plans for these groups can be effected in various ways. It is important to sit down with each person who may have ownership in more than one dealership or line of business to determine if a Control Group or Affiliated Service Group exists. If one does, several areas of the plan status may be impacted including:

        Coverage Testing under Internal Revenue Code 410(b)

  • Each plan of the Controlled Group must independently pass either the Ratio Percentage Test or the Average Benefits Test requirements under this Internal Revenue Code (IRC) section.
  • Plans that pass 410(b) may be treated as an independent plan for purposes of allocating employer contributions and for nondiscrimination testing under IRC401(a)(4) and 401(k) and (m).
  • Plans that must be aggregated to pass IRC 410(b) must be aggregated for allocating employer contributions and for nondiscrimination testing.
  • Control Groups must follow special rules regarding the completion of the Form 5500.
  • Plans in a Control Group may be permissively aggregated for Top Heavy Testing under IRC 416.
  • The plans may require aggregation based on participation of Key Employees of the Control Group. Only the specific plans within a Control Group that are determined to be Top Heavy must be administered as such.