When 403(b) plan participants have assets held by former service providers, it can pose major administrative and compliance problems for plan sponsors — problems that could eventually lead to action from federal regulators. A new strategy from the Principal Financial Group and National Benefit Services (NBS) can help financial professionals and their large-plan 403(b) clients manage the so-called "legacy asset" dilemma.
The strategy combines the service delivery of The Principal, including education and transition services, with deeper legacy asset expertise from NBS — a TPA that is highly experienced in meeting the administrative and compliance demands of plans with legacy assets.
Complexities for sponsors of 403(b) plans with legacy assets include Form 5500, small amount payments, qualified domestic relations orders, beneficiary designations and death claims. These are in addition to relatively well-known complexities with loans and hardship distributions.
