Directing Retirement Plans Part 2 (U.S.) / Managing Retirement Plans Part 2 (Canada)
From design to administration
Part 2 is operational and technical: how contributions are deposited and allocated, how distributions and loans are processed, how plans are reported and audited, and how plans end. In the U.S., know required minimum distributions, rollover rules, qualified domestic relations orders, hardship and loan rules, tax withholding, Form 5500 reporting, the independent audit threshold, the fidelity bond requirement, and fee disclosure. Plan termination raises PBGC issues for covered DB plans and final allocation questions for DC plans.
Fiduciary and investment oversight
Section 404(c)-type relief, investment policy statements, qualified default investment alternatives, and provider fee benchmarking are standard exam territory. The core idea: procedural prudence, documented, is the defense.
Canadian operations
Understand pension standards requirements for funding and actuarial valuations, member statements, locked-in funds, plan wind-up and surplus treatment, and capital accumulation plan disclosure. Administrators must document decisions and communicate clearly with members.
Worked example
A participant with a $500,000 account reaches the age at which required minimum distributions begin. The applicable distribution period from the Uniform Lifetime Table at that age might be, say, 26.5 years, producing an RMD of roughly $18,868. The trap: using the wrong table or forgetting that the prior year-end balance drives the calculation.
Traps and rule of thumb
Traps: assuming all distributions are penalty-free at a fixed age; confusing loan limits with hardship rules; forgetting that reporting thresholds and bond amounts are separate tests. Rule of thumb: for any transaction, check four things - plan document, tax code, fiduciary process, and reporting obligation.