| (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.
(D) Representative's ORP Knowledge. ORP employers may
require ORP companies to certify that their designated representatives
are sufficiently trained and knowledgeable about ORP, including an
understanding of the statutory distribution restrictions that must
be included in all ORP contracts.
(E) Responsibility to Correct Mistakes. ORP employers
may require a company to fully rectify, at the company's cost, any
mistakes made by a designated company representative concerning the
delivery of incorrect ORP information and any resulting problems.
(16) Solicitation Practices. Each ORP employer shall
establish the following procedures related to company solicitation
practices.
(A) Sales Presentations. Authorized representatives
shall be permitted to make sales presentations to ORP-eligible employees
on the ORP employer's premises, under the following conditions:
(i) only at the employee's request;
(ii) as a guest of the employee and ORP employer; and
(iii) in compliance with the ORP employer's applicable
policies and procedures.
(B) Prohibited Gifts. ORP company representatives shall
be prohibited from providing gifts or monetary rewards directly or
indirectly to any employee of the ORP employer for information on
newly eligible employees.
(C) Bulk Campaigning Prohibited. Authorized representatives
shall be responsible for providing appropriate sales literature and
service at locations designated by the ORP employer. Unless specifically
authorized by the ORP employer, ORP company representatives shall
be prohibited from using campus bulk mailing (including electronic
mail) or telephone campaigning.
(D) Violations. ORP employers shall reserve the right
to restrict solicitation privileges of authorized representatives
based on violations of the solicitation procedures in this paragraph
and each ORP employer's local policies and procedures.
(d) Qualified Domestic Relations Orders (QDROs).
(1) Company Responsibilities. Each ORP employer shall
ensure that all ORP contracts include a provision that the ORP company
is solely responsible for determining whether a domestic relations
order is qualified and payable in accordance with Texas Government
Code, Chapter 804. In lieu of requiring a contractual provision, ORP
employers may require companies to certify, as part of the ORP employer's
ORP company authorization process as provided in subsection (c) of
this section, that the ORP company is solely responsible for determining
whether a domestic relations order is qualified and payable in accordance
with Texas Government Code, Chapter 804.
(2) Company Interpretation. ORP employers may include
criteria relating to an ORP company's interpretation of Texas Government
Code, Chapter 804, in the ORP employer's ORP company authorization
or certification process as provided in subsection (c) of this section.
(e) Investment Advisory Fees. Participants may pay
certain investment advisory fees with tax-deferred funds in their
ORP account in accordance with the following conditions.
(1) Investment advisory fees may only be paid with
amounts in a participant's ORP account in accordance with the following
provisions.
(A) The investment advisory fees for each fiscal year
shall not exceed two percent of the annual value of the participant's
account as of the last day of that fiscal year.
(B) The fees shall be paid directly to a registered
investment advisor that provides advice to the participant.
(C) The investment advisor to whom the fees are paid
shall be registered with the Securities and Exchange Commission and
any other applicable federal or state agencies, and shall be engaged
full-time in the business of providing investment advice.
(D) The participant and the investment advisor shall
enter into a contract for a term of no more than one year. A contract
that automatically renews each year shall be considered acceptable
as long as both parties have the right to sever the relationship,
with reasonable notification, at any time.
(2) An ORP employer shall not prohibit participants
from utilizing this right and shall not restrict the payment percentage
to less than two percent.
(3) An ORP employer may include in its ORP company
authorization or certification process, as provided in subsection
(c) of this section, a provision that prohibits commissions to an
individual who also receives investment advisory fees for the same
ORP account.
Cont'd... |
