How do we set up a deferred compensation account?
After the co-op Board has adopted the deferred compensation plan, the next step is to establish accounts under the cooperative’s name for the benefit of the underlying participant. Homestead Funds account opening paperwork is separate from any plan-level paperwork provided to Homestead Advisers’ Deferred Compensation Team. If this is the first deferred compensation plan for the cooperative with Homestead Funds, we will need:
- One Authorized Cooperative/Employer Representative Form to name account signers
- A Deferred Compensation Participant Enrollment Form for each participant who will be funding an account within the next three months
Homestead Funds maintains the names of the account signers on file, so if the account signers have not changed, each new participant account only requires the Deferred Compensation Participant Enrollment Form for that participant.
Deferred Compensation Pro Tips
- Know the plan type at initial plan setup and with each participant enrollment. This is important information to help with plan administration. If you are uncertain of your plan type, the Homestead Advisers Deferred Compensation Team can provide guidance.
- If the plan document allows, you can choose for participants to have telephone exchange options on the application. This allows a participant to exchange or rebalance current money in the account by speaking with a Homestead Funds representative. If you don’t, any such requests must be submitted in writing and signed by an authorized signer for the cooperative as on file with Homestead Funds.
- Encourage your participants to establish an Asset Allocation Model to make payroll easy! When a model is in place, the model directs payroll allocations into the Homestead Funds account and any allocation changes are controlled by the participant. After the Homestead Funds account is established, the participant can add a model online after logging into their Homestead Funds account or the cooperative can submit the Asset Allocation Model Form on the participant’s behalf. When you submit your payroll you’ll just need to include “555” as the Homestead Funds fund number and the amount instead of each Homestead Funds fund number and amount separately.
- All mailings will be sent to the cooperative address. Make sure participants receive a duplicate copy of the quarterly statement and investment confirmation statements by filling out the “Duplicate Mailing Address” section of the application.