Most TPAs follow industry standards for distributions, simply ensuring the request form is filled out correctly and then they process the request. However, since accuracy and compliance are the cornerstone principles of Pinnacle Financial Services (Pinnacle), we go the extra mile to ensure your protection and that of your employees.
During the year, you send payroll and contribution data to Pinnacle for each pay period. Pinnacle uploads that data into our system and creates a file to submit to the Investment Company. Upon receipt of the file from Pinnacle, the Investment Company initiates the ACH to deposit the funds in your participant’s accounts.
When a participant terminates mid-year and requests a distribution, Pinnacle has the data that has been provided by you to them. We also have all the data submitted to the Investment Company.
The census verification form that Pinnacle will request from you is for your YTD payroll records from your payroll system. We already have the data from our system and the deposits at the Investment Company. We will cross reference your YTD payroll records with the data we have collected and the deposits made at the Investment Company. Any differences would be identified and accounted for.
This is done because sometimes payroll checks are still in transit, sometimes checks are voided or changed from the data provided during the regular contribution process and sometimes the deposits at the Investment Company are completed incorrectly. By verifying all the components, Pinnacle is helping ensure that the distributions are accurate.
When a distribution is requested, Pinnacle will contact the payroll provider to request a census verification form which includes:
Employer, Employee Name and Social Security Number
Date of Hire – to verify vesting/eligibility
Date of Termination – to verify the distributable event
Date of Last Compensation – to verify all payroll files are included and accurate
Total participant deferrals and match – to reconcile participant totals to ensure accurate and full amounts are distributed
Number of years the participant worked at least 1,000 hours – to verify vesting for accurate match totals to be released
Upon receipt of the information above, a final reconciliation is performed and then a review is made to verify vesting, total contributions, and final determination of the distributable event.
Pinnacle then contacts the Plan Administrator for authorization/signature.
Once authorization is received, Pinnacle coordinates the release of funds. From the date the request is received, there is generally a 7-10 business day processing time.