| (B) Objective Selection Process. ORP employers may
utilize an objective process to review the quality of ORP products
and services and select ORP companies and products using pre-determined
standards either in a competitive selection process or in a minimum
criteria process. Standards may include performance relative to peer
products in the same asset class, costs and fees paid by the participant
to participate in the investment products, financial stability of
the company, company ratings, and service to participants, including
type of service delivery model, company financial counseling, and
other services for participating employees. ORP employers may establish
additional standards that must be met by ORP companies to remain on
the ORP employer's list of authorized companies, such as minimum participation
standards.
(C) Participant Requests. ORP employers shall not be
required to authorize any ORP company, company representative, or
product requested by any participant, although ORP employers may take
such requests into account if it may be done in accordance with applicable
laws, rules and policies.
(D) Periodic Review of Policies. Each ORP employer
shall periodically review and update its authorization or certification
policies and procedures.
(E) Periodic Re-Authorization. Each ORP employer shall
periodically re-authorize or re-certify companies.
(6) Participant's Change of Companies.
(A) Two Opportunities per Year. Each ORP employer shall
provide ORP participants with at least two opportunities during each
fiscal year to select a different company from the ORP employer's
list of authorized companies. The opportunities may be provided on
set dates during the year or on a flexible individualized basis.
(B) Two Changes per Year. Each ORP employer shall allow
a participant to change his or her company selection on either or
both of the opportunities provided by the ORP employer under subparagraph
(A) of this paragraph.
(C) Effective within 35 Days. The ORP employer shall
start sending the participant's ORP contributions to his or her newly
selected company beginning with the next payroll period if practicable,
but not later than 35 days after the date the participant signs and
submits the appropriate forms to the ORP employer.
(i) Problems. If the ORP employer cannot comply with
this deadline due to circumstances beyond the ORP employer's control,
the ORP employer shall notify the participant of the problem and shall
provide the participant with an opportunity to change his or her company
selection.
(ii) Additional Change. A participant's change of companies
made in accordance with clause (i) of this subparagraph shall not
be counted against the number of changes required under subparagraph
(B) of this paragraph.
(D) Prior Contributions. Amounts contributed by the
participant to previously selected ORP companies, including ORP contributions
made during prior periods of employment with the same or another ORP
employer, shall be under the same statutory distribution restrictions
as the contributions in the participant's account with his or her
newly selected ORP company.
(E) Transfers of Prior Contributions.
(i) Each ORP employer shall include a provision in
the employer's ORP plan that permits participants to execute a contract
exchange to transfer ORP funds that were contributed during the current
or prior periods of employment with the ORP employer to another ORP
company that is authorized by the employer to receive the funds. A
contract exchange shall not be counted against the number of changes
required under subparagraph (B) of this paragraph.
(ii) Each ORP employer may include provisions in the
employer's ORP plan that permit participants to transfer ORP funds
from one ORP employer's plan to another ORP employer's plan provided
both employer plans include provisions authorizing such plan-to-plan
transfers.
(7) Grandfathered Companies.
(A) ORP employers may allow participants to continue
contributing to an ORP company that is no longer on the ORP employer's
list of authorized companies. Such a company shall be referred to
as a grandfathered company.
(B) Institutions may allow participants who directly
transfer from another Texas public institution of higher education
to continue contributing to the same ORP company that they were contributing
to at their prior ORP employer, provided the institution verifies
that the contract includes the statutory distribution restrictions.
(8) Confirmation of ORP Contributions. ORP employers
shall require ORP companies that receive contributions for the ORP
employer's ORP participants to submit confirmation of receipt of funds
directly to each participant at least quarterly. The confirmation
shall contain the date and amount of each ORP contribution received
during the reporting period.
(9) Confirmation of Funds Transfer. ORP employers shall
require ORP companies that receive contributions for the ORP employer's
ORP participants to, immediately upon execution of a transfer from
one fund or investment or account to another fund or investment or
account, submit a confirmation directly to the participant, unless
specifically waived by the participant in writing. The confirmation
shall include all transfer information, including a statement of any
applicable charges.
(10) Required Company Reports. Each ORP employer shall
require all ORP companies that receive contributions for the ORP employer's
ORP participants to submit, at least annually, a report or reports
to each participant having ORP accounts with that company, including
accounts that are no longer receiving current contributions, containing
the information indicated in paragraphs (11), (12) and (13) of this
subsection.
(11) For all accounts, the following information shall
be provided:
(A) name and address of the participant;
(B) identifying number;
(C) total payments received during the reporting period;
(D) expense charges during the reporting period;
(E) net payments during the reporting period;
(F) total value of account at the end of the reporting
period; and
(G) net cash surrender value of account at the end
of the reporting period reflecting all potential charges against the
account if it were surrendered for cash as of the last day of the
reporting period.
(12) For fixed and variable annuity accounts, the following
additional information shall be provided:
(A) interest rate or rates paid on the account from
the previous reporting period to the end of the current reporting
period; and
(B) where multilevel rates of interest were paid on
an account, a breakdown showing the amount in the participant's account
at each interest level, the amount of interest earned at each interest
level, and the rates of interest. An ORP company may exclude the information
required by this subparagraph concerning multilevel rates of interest
from the annual report, but if this information is not provided on
at least an annual basis, the company shall provide it at any time
upon the participant's request.
(13) For variable annuity and custodial accounts, the
following additional information shall be provided:
(A) units of each fund or investment or account purchased
during the reporting period;
(B) total units of each fund or investment in the account
at the end of the reporting period; and
(C) value of unit of each fund or investment or account
at the end of the reporting period.
(14) Optional Information. ORP employers may require
ORP companies to provide participants with other information in addition
to the reporting requirements in paragraph (10) of this subsection,
including, but not limited to:
(A) additional account-related information;
(B) information about the company; and
(C) general educational information related to investments.
(15) Authorized Company Representatives.
(A) Designated Representatives. ORP employers may require
ORP companies to designate representatives, or may require that the
company and the ORP employer jointly designate representatives, who
are authorized to communicate directly with the ORP employer's ORP-eligible
employees concerning the company and its products.
(B) Restricted Number. ORP employers may restrict the
number of representatives authorized to represent each company.
(C) Brokers. ORP employers may authorize brokers who
represent more than one authorized company. Such authorization may
be in addition to the number of designated representatives of a particular
company.
Cont'd... |
