(a) Definition of current market value. In this section, the term "current market value" has the following meanings.
(1) For an investment in a qualified investment product offered by a bank, credit union, or savings and loan association, current market value means the amount of deferrals plus investment income minus withdrawals minus applicable fees.
(2) For an investment in a mutual fund, current market value means the price of each share at the end of the calendar quarter multiplied by the number of shares purchased with deferrals and investment income minus applicable fees.
(3) For an investment in a term life insurance product, the current market value is usually zero.
(4) For an investment in a life insurance product, current market value means the cash value of the product minus applicable fees.
(5) For an investment in an annuity, current market value equals the amount of deferrals plus investment income minus payouts minus applicable fees. For annuitized accounts, current market value means the present value of all remaining payments, taking into consideration the prevailing statutory interest rates pursuant to the Texas Insurance Code, Article 3.28.
(b) Reports to participants or beneficiaries.
(1) Generally.
(2) Investments in life insurance products. The requirements of the preceding paragraph apply to investments of deferrals and investment income in life insurance products except:
(3) Final reports. If a participant or beneficiary receives a lump-sum distribution, the prior plan vendor or TPA from whom the lump-sum distribution is made shall issue a final report to the participant or beneficiary containing the information required in paragraph (1) of this subsection. The report must accompany the lump-sum distribution.
(c) Capital category reports. Once each quarter, or more frequently if appropriate, a prior plan vendor which is a bank or savings and loan association shall report to the plan administrator that financial information regarding capital categories and risk-based ratios described in §87.7(i) and (j) of this title (relating to prior plan vendor participation).
(d) Reports and remittance to the plan administrator.
(1) Frequency and coverage of reports and payment of fees. Every vendor in the prior plan that has participant or beneficiary deferrals, and/or investment income, must ensure that the plan administrator receives a report no later than the 15th day after the end of each calendar quarter. The fiscal year end report must include transactions for July and August. Every prior plan vendor must also remit any fees assessed to it by the plan administrator, no later than the 15th day after the end of each quarter. Every vendor must ensure that the plan administrator receives a special report at the end of the fiscal year (August 31st), no later than fifteen days past fiscal year end - September 15th, in addition to the normal quarterly reporting schedule. The report must be in the format specified in this subsection and must cover all transactions during the calendar quarter.
(2) Content of reports. For each participant or beneficiary whose deferrals and investment income are invested in a qualified investment product offered by the vendor, the report required by this subsection must contain but is not limited to:
(3) Format of reports.
(4) A prior plan vendor that fails to submit to the plan administrator any required report with an authorized signature or the assessed fee will be subject to formal reprimand. After two formal reprimands, a vendor may be expelled from the plan and subject to further liability as applicable.
(5) Late reports and/or fee payment.
(e) Recordkeeping. A prior plan vendor shall retain records concerning investments in each qualified investment product by each participant. The records must be retained until the expiration of the second year after the prior plan vendor has distributed all the participant's deferrals and investment income.
(f) Quarterly reconciliation. In accordance with §87.3(b)(3)(H) of this title (relating to Participation by State Agencies), a benefits coordinator may be responsible for balancing participant and beneficiary records and reconciling those records with the data provided by qualified vendors and the plan administrator. Prior plan vendors shall assist the plan administrator and state agencies with correcting and explaining any discrepancies. Failure to assist the plan administrator and state agencies with this reconciliation will be considered a rules violation, and the plan administrator may take appropriate action under §87.21 of this title (relating to Remedies).
Source Note: The provisions of this §87.19 adopted to be effective March 28, 1991, 16 TexReg 1560; amended to be effective January 10, 1992, 16 TexReg 7743; amended to be effective November 23, 1992, 17 TexReg 7911; amended to be effective January 1, 1994, 18 TexReg 8460; amended to be effective November 9, 1994, 19 TexReg 8617; amended to be effective January 5, 1996, 20 TexReg 11022; amended to be effective November 11, 1996, 21 TexReg 10766; amended to be effective December 8, 1997, 22 TexReg 11718; amended to be effective January 5, 2003, 27 TexReg 12370; amended to be effective September 11, 2003, 28 TexReg 7785; amended to be effective September 30,2004,29TexReg 9204; amended to be effective May 29, 2005, 30 TexReg 3023; amended to be effective September 14, 2006, 31 TexReg 7367; amended to be effective December 31, 2007, 32 TexReg 10054