Plan Sponsor Transition GuideDetails on how to process your payroll with the new SMART Plan recordkeeper.

TransiTion

smartOffice of State TreasurerTimothy P. Cahill

s a v e m o n e y a n d r e t i r e t o m o r r o w

98966 Payroll Guide (11/15/2007) 1

Table of ContentsOverview..........................................................................2

Processing.Payroll.............................................................3

Plan.Service.Center.(PSC).Overview................................4

Payroll.Data.Interchange.(PDI)...........................................5

PSC—Manual.Method......................................................6

PSC—Additional.Features.................................................6

Deferral.Recordkeeping....................................................7

PSC.Security.....................................................................8

Frequently.Asked.Questions.............................................9

PSC.Reporting—Employee.Reports...............................10

PSC.Reporting—Plan.Reports........................................ 11

Payroll.Remittance.via.Paper.and.Check......................... 11

Inserts:.

.......Payroll.Data.Survey

.......Plan.Service.Center.(PSC).Authorization.Form

.......Automated.Clearing.House.(ACH).Authorization.Form

.......Payroll.Data.Interchange.(PDI).Requirements

.......PSC.Online.Plan.Administration

.......Deferral.File.Feed.Layout.–.Uploadable

.......Deferral.File.Feed.–.Electronic.Report.Sample

98966 Payroll Guide (11/15/2007) 2

Questions?

Your assigned Great-West Retirement Services Implementation Specialist will assist you in setting up your payroll remittance through the PSC. The specialist is also available to answer any questions you may have regarding the transition. Please refer to the Great-West Retirement Services cover letter for your assigned Implementation Specialist’s name and contact information.

Great‑West Retirement Services® was awarded the contract to provide third‑party recordkeeping and administrative services for the Massachusetts Deferred Compensation SMART Plan (the SMART Plan). The scheduled transition date of participant accounts from ING to Great‑West Retirement Services is February 29, 2008. ING will process payrolls through February 22, 2008. Please contact your assigned Great‑West Retirement Services Implementation Specialist to schedule your first payroll after February 22, 2008. Your assigned Great‑West Retirement Services Implementation Specialist will assist you in setting up your payroll remittance through the Plan Service Center (PSC). The specialist is also available to answer any questions you may have regarding the transition. Please refer to the Great‑West Retirement Services cover letter for your assigned Implementation Specialist’s name and contact information.

This guide will provide information on payroll processing through our PSC. To print additional copies of this Plan Sponsor Transition Guide, access forms, attend a webinar or locate an upcoming training seminar near you, go to www.mass-smart.com and click Plan Sponsor.

In January, a transition brochure will be mailed to participants informing them of the change and inviting them to attend informational meetings offered statewide. Prior to the transition, it is business as usual. Participants may access their account via the SMART Plan Customer Service Center at (877) 457-1900 or www.mass-smart.com and clicking Account Access.

Overview

98966 Payroll Guide (11/15/2007) 3

Getting started Welcome to the PSC, our Internet‑based application for administering the SMART Plan. The PSC offers you instant access to your plan information through the Internet and employs a point‑and‑click, user‑friendly interface that makes the application easy and convenient to use. Through the PSC, you will have easy access to plan and participant information, payroll processing, reports and participant forms.

This guide will provide you with details about the PSC. After reading through the included materials, we will need your assistance in completing several forms that will enable us to set you up as a plan sponsor on our system:

Payroll Data Survey• —This document will provide us with a contact name, address and phone number

Plan Service Center (PSC) Authorization Form• —This document will provide your authorized personnel with access to the PSC

Automated Clearing House (ACH) • Authorization—This document will provide banking information for the ACH of contributions

In addition, if you will be uploading a payroll file, we will need a sample Payroll Data Interchange (PDI) file that we will use to map your payroll information to our system. Attached you will find a PDI requirements document and a PDI worksheet to identify the desired payroll fields. Please note that there is also an option to enter your payroll data online without using a file if you have fewer than 75 participants and are not able to create a PDI file. Information on this option is provided on page 8. While the goal of the SMART Plan is to automate the payroll process as much as possible, we also understand that there are some employers with a small number of participants that may need to continue sending payroll using a paper report and check.

If we have any questions once we receive the requested information, we will contact the person indicated on the Payroll Data Survey. After we have reviewed the completed materials, we will contact you directly to go over any questions that you may have and also to set up a time and date for the remittance of your first payroll to Great‑West Retirement Services through the PSC.

if you would like to see an online demo of the PsC:

Go to www.gwrs.com.1.

Click on the “Plan Sponsor” button.2.

On the left‑hand side of the page, click on the “Public/3. Non‑Profit” link.

On the left‑hand side of the page, click on the “Plan 4. Service Center” link.

In the center of the page, click on the “View Plan Service 5. Center Demo” link.

Click the “Login” button.6.

Click on the “Submit” button under Select a Plan.7.

This will get you to a page that reads “Welcome to the 8. Plan Service Center (Demo).” Use the side navigation bar to move up and down the page.

From this page you can access:

Retirement Plan Admin

Contains details about the Plan

Process Contributions

This is where payroll is processed

ReportsContains information about the reports available and how to generate them

Forms Contains PDFs of the participant forms

Processing Payroll

98966 Payroll Guide (11/15/2007) 4

system requirementsBefore using the PSC, make sure you have the following:

Access to the Internet that supports a minimum • connect speed of 28.8K or greater

An Internet browser, such as Netscape• ® Navigator or Microsoft® Internet Explorer

Adobe Acrobat Reader (only needed to view • forms or documents—not necessary for processing payroll data)

PSC login ID and password (will be issued • by the PSC Technical Team once the PSC Authorization Request form has been completed and returned to Great‑West Retirement Services)

Login access to the PSC is determined by the completion of the PSC Authorization Request form and access is granted based on two levels:

Inquire Only – This allows the user to view • information and order reports

Full Access – In addition to inquire, this • allows the user to process payroll and update participant information

Upload of Participant information Using a Pdi FileParticipant data is acquired from the payroll system or spreadsheet file and transmitted electronically via the PSC. The file layout of the payroll file must remain constant each time the payroll file is processed, and a permanent file name must be used. Additional information on PDI files is located in the next section of this guide. In addition, we have included a PDI worksheet that will help in identifying the fields and locations within your file.

We will need a test file in order to set up your layout on our system.

aCH ContributionsBy completing the ACH Authorization form, the Plan Sponsor provides authority for withdrawals to be made from its bank account. The ACH method eliminates wire and mailing costs and also allows the plan sponsor to control the timing of the contribution to the participants’ accounts. Contributions are posted to participant accounts the business day following the completion of the file upload process. The ACH transfer is initiated by an authorized user at the Plan Sponsor level through the PSC. Access for approval of the ACH is limited to persons with full access level, and the authorization approval is traceable by login ID.

Enclosed with this guide are several additional documents concerning the PSC:

PSC Authorization Form• (Required to be completed and signed)

ACH Authorization Form• (Required to be completed and signed)

PDI Requirements•

PDI Worksheet•

PSC Online Plan Administration•

PSC Reporting•

Plan Service Center (PSC) Overview

98966 Payroll Guide (11/15/2007) 5

Payroll Data Interchange, or PDI, is a critical ingredient for accurate administration and reliable servicing of the SMART Plan. The employee data from your payroll system is the data needed for PDI. With PDI, we are able to:

Process participant contributions to the plan.•

Automatically update employee demographic • information.

why use Pdi?

Eliminates any entry of data for updates•

Keeps our information consistent with your • payroll system

Allows us to provide accurate information on • the Internet and voice response system to SMART Plan participants

Streamlines the administration of your plan• How can i create the Pdi file? This primarily depends on how payroll is handled within your agency. If there is a payroll vendor, such as ADP, Ceridian, Paychex, etc., the vendor can create the file in the format we require. All that is required then is to download the file to your PC. Then, you can utilize our PSC to transmit the PDI file to us.

If you have your own payroll system, you similarly would have your payroll system programmer create the PDI file.

Another option is to create the PDI file using a spreadsheet, such as an Excel file.

PDI files may be submitted in a standard space delimited ASCII format (.prn) or as a comma delimited file (.csv).

How does the Pdi file get processed?Once you have created the PDI file, the record layout mapping must be defined by Great‑West Retirement Services. This can be accomplished by completing the worksheet provided and forwarding the information to Great‑West Retirement Services, along with a sample of the file itself.

Once that mapping has been defined and login IDs have been established, you can utilize the PSC to transmit and process the PDI file. Payroll processing will begin with Great‑West Retirement Services after February 22, 2008. Contact your assigned Great‑West Retirement Services Implementation Specialist to schedule your first payroll remittance with Great‑West Retirement Services.

This file mapping definition will be used on an ongoing basis to interpret your PDI file. If there is any change to the record

layout, it is very important that you notify the Great‑West Retirement Services – Plan Technical Support team so they are able to modify the mapping. Failure to notify Great‑West Retirement Services of any change could result in failed processing and may potentially affect the integrity of your plan data on our system.

when does the Pdi file get processed?The PDI file should be sent on every payroll cycle, or whenever a contribution to the SMART Plan needs to be made. This will allow any participant updates or new participants to be added prior to contribution processing. Contributions will be effective in participant accounts the business day following the successful completion of the payroll process through the PSC with an ACH debit.

what information needs to be included on the Pdi file?A complete listing of all possible data fields is included with this guide. The administrative process associated with each data field is reflected on the document. It may not be possible to include all of the data fields listed; as long as the missing information does not affect the administration of your plan, this may not be an issue.

The worksheet included with this guide should be completed and sent to Great‑West Retirement Services for review. It is important to note that the position and length of data fields is not critical, and that it is not necessary to leave blank spaces for fields of data that will not be included in the PDI file.

Listed below are some of the fields that are generally included in a PDI file. Because the PDI file is extremely flexible, it is designed to accept very rudimentary information, or a complete PDI with all possible fields of data.

Plan Number*Social Security Number*First Name*Last Name*Date of Birth*GenderMarital StatusPlan Sponsor Number*AddressPhone Number (Work/Home)Hire DateTermination DateSalary AmountRe–hire DatePayroll DateContribution Amount*

* Mandatory fields

Payroll Data Interchange (PDI)

98966 Payroll Guide (11/15/2007) 6

If you have fewer than 75 participants and are not able to create a PDI file, you will still be able to process your payroll through the PSC with an ACH debit. During your first payroll call, a PSC Technician will walk you through the process of adding your employees and contribution amounts through the PSC. For subsequent payroll transmissions, you will be able to “copy” your previous remittance. You are then able to make changes, additions or deletions before validating your remittance.

Once you have completed the PSC Authorization Request form, you will receive your login ID along with dial-in instructions for calling Great-West Retirement Services to process your first payroll with a PSC Technician after February 22, 2008.

The following instructions should be used for processing your payrolls.

Go to 1. www.mass-smart.com.

Click on the “Plan Sponsor” link.2.

Enter your user ID and password and click the Sign 3. On box.

Select the Plan number for which you’d like to process 4. payroll and click the “Submit” button.

This will bring you to a page that reads “Welcome to the 5. Plan Service Center.”

Select the third tab from the top left of the screen, which 6. reads “Process Contributions.”

Select “Start New Remit.”7.

Enter the payroll date and estimated contribution total and 8. click “Continue.”

Under “Select Remit Method,” click on “Enter 9. Data Online.”

Select the money source for the contributions you will be 10. processing and click “Continue.”

Enter the Social Security number (SSN) and contribution 11. amount for each participant.

Once finished, click on “GO – Validate this Remittance.”12.

If errors exist, you will need to clear them or accept the 13. warnings before moving on.

Confirm the money source by clicking on the box. 14.

Confirm you “have read and accept all warnings and 15. notices on the page” by clicking on the box.

Click on “Complete Transaction.”16.

Print the confirmation page for your records.17.

Contributions will be effective in participant accounts the business day following the successful completion of the payroll process through the PSC with an ACH debit.

PSC—Additional Featurestermination dates You will be able to add participant termination dates with Great‑West Retirement Services through the PSC after February 22, 2008. Once you have received your PSC login ID and password, you will be able to log in to the PSC. Once logged in, follow the steps listed below.

Select the “Retirement Plan Admin” tab.1.

Select “View/Change Employee Information” under 2. the Employee Admin tab on the bottom left. Select an employee, then scroll down to Employment Information.

Select “Add/Change Employment Info.”3.

Enter the participant termination date.4.

Click the “Save” button.5.

PSC—Manual Method

98966 Payroll Guide (11/15/2007) 7

Electronic deferral recordkeeping allows participants to make deferral changes through the automated voice response system, the Web site or a SMART Plan representative. Deferral changes are subsequently submitted to the Plan Sponsor for updating the payroll system via a deferral feed file or report that is placed in the Plan Sponsor’s PSC directory. This provides a convenient way for participants to make changes to their deferral, and it also provides a quick and easy method for your payroll department to collect deferral change information as paper deferral changes will no longer be needed.

There are two types of reporting that can be generated for you. One is a file that can be directly uploaded into your payroll system. A layout of this file has been included in this packet. If you do not have the capability to upload the electronic file, a report version of the deferral file is available to print off the PSC and can be manually entered into your payroll system. With either method, you will receive an e‑mail informing you that a file or report has been deposited into your PSC directory.

To implement this feature, we will need an initial listing of deferrals in order to populate our system. Please include a report that includes the participant name, Social Security number and deferral amount or percentage so we can initialize our system. Effective with the transition on February 29, 2008, all deferral changes will be made

Deferral Recordkeepingthrough Great‑West Retirement Services and fed to the Plan Sponsor. In emergency situations, a deferral change can be made directly to the payroll system. However, if this happens, you would also need to make the change through the PSC in order to keep both systems in sync.The deferral file will be generated based on the same frequency as your payroll cycle and deposited to your PSC directory five business days prior to each payroll date. The file will include new and changed deferrals since the previous report. If the file production date falls on a holiday or weekend, you will receive the file on the following business day.

In addition to the deferral recordkeeping enhancement, the Commonwealth has added a six‑month deferral suspension period for those individuals who receive an unforeseeable emergency withdrawal. This suspension period follows ERISA guidelines, which brings the SMART Plan more in line with standard industry practices. The process to suspend deferrals will be automatic. When an unforeseeable emergency is processed at Great‑West Retirement Services, the participant’s deferral will be set to zero and fed to you on the next deferral file. A confirmation document will be mailed to the participant advising him or her of this change and providing the suspension end date. At the end of the suspension period, a participant may initiate a new deferral and the change will be fed to you on the next file feed.

98966 Payroll Guide (11/15/2007) 8

data encryptionThe PSC system employs standard RSA 40‑bit encryption on all information transmitted between the client browser and the PSC Web server. Data encryption of up to 128 bits can be supported by the PSC system if the client’s PC is employing the use of a 128‑bit encrypted browser. User login ID and password information is encrypted using Secured Socket Layer (SSL) protection, and any data files or reports that are uploaded or downloaded are done so with SSL protection.

User Login ids and PasswordsEach user receives a unique login ID and password. Upon the initial login, the password will expire and the user will be prompted to enter a new one. The PSC passwords are set to expire every 29 days. Strict password rules are employed on the PSC system to prevent users from using common words or phrases when they change their password. Passwords must be between six and eight characters in length with no spaces allowed, and must be a combination of alphabetic letters and numbers. Passwords are also case sensitive and must be entered exactly as set each time they are requested.

Login IDs are assigned to authorized users in accordance with the information received on the PSC Authorization form. Only those individuals identified on the application will be given a login ID. It is strongly encouraged that authorized users do not share their ID or password with others.

Whenever the PSC user connects to and logs on to the PSC system, he or she is prompted to enter the login ID and current password. A query to the Great‑West Retirement Services database will determine if the user ID and password are valid. In the event that the query fails, an error message will be displayed on the user’s PC and he or she will be prompted to re‑enter the ID and/or password before gaining access to the system.

different Levels of securityThe PSC security area sets up the login IDs based on the accessibility that the user requires. Typically, this means that a specific login ID will be allowed access to its authorized group accounts only. As an additional level of security, an ID can be set up to access one or more separate divisions or Plan Sponsors associated with the group account(s). In the event that divisional security applies, the user will not be able to inquire or update information on individuals in a division for which he or she does not have access. Functionality built into the PSC security system enables us to modify or delete user access to the system at any time.

Full vs. inquiry-only accessEach user ID can be set up for either full or inquiry‑only access. By default, when an ID is set up, it is granted full access to the group account(s) and division(s) identified on the PSC Authorization form. Full access enables the user to view or update all of the information on his or her plan, including the ability to add new employees to the plan, change existing employee information and process plan payroll data. In contrast, inquiry access enables the user to view information on the SMART Plan as necessary; however, making changes to the data is not allowed.

There is an additional level of security that provides access for SMART Plan administrators to complete and approve disbursements online using their ID and associated permissions. This process will serve as their electronic signature and approval of the disbursement.

security Calls to the isis database A stored procedure on the ISIS database is called whenever the user logs on to the system. This procedure will verify the group account, division and security level (full or inquiry) for which the user is set up. Our procedure prevents the user from gaining access to a group account or division that he or she is not authorized to access. The module is called whenever a group account or division is selected from any of the PSC forms. If the procedure fails, an appropriate error or warning message will be displayed and the user will be prevented from continuing until the error condition has been corrected (e.g., entering a valid group account).

event Logging on the isis database Another stored procedure running on ISIS logs each event or process performed by the PSC user. This information is written to a table on ISIS and includes the following: user login ID, the date and time that the event took place and, in some occurrences, the group account and/or employee Social Security number involved in the transaction.

security tables on isisSeveral tables on the ISIS database are used for authenticating and logging PSC user information as the user navigates, views or changes information on the system. These tables and the user interface for accessing them are highly restricted and are available only to those technical support employees to whom appropriate security has been granted. Finally, the PSC users themselves have no direct access to any of the underlying tables or forms used to maintain user security.

PSC Security

98966 Payroll Guide (11/15/2007) 9

Frequently Asked QuestionsCostQ. Is using the PSC expensive?A. Not at all. You may use the PSC without any

additional cost.

Q. Will I realize a cost savings by using the PSC?A. Yes! In at least two different ways you can lower the cost of

administering the SMART Plan. The following can reduce your costs:

No long‑distance telephone expenses•

Elimination of mailing charges for correspondence • and reports

securityQ. Is Internet access really secure?A. Most certainly. We’ve secured our database and systems

against all Internet security risks through a specialized firewall. In addition, all data transmissions are encrypted in both directions between our location and your browser.

Q. Are different levels of security available based upon different users’ needs?

A. The PSC security area sets up the login IDs based on the accessibility that the user requires. Typically, this means that a specific login ID will have access to certain authorized group accounts only. As an additional level of security, an ID can be set up to access one or more separate divisions or Plan Sponsors associated with the group account(s). In the event that divisional security applies, the user will not be able to inquire or update information on individuals in a division for which they do not have access. Functionality built into the PSC security system enables us to modify or delete user access to the system at any time.

Q. Is technical support available after the transition?A. Yes, it is. We have a highly trained staff of professional

telephone representatives who monitor our toll‑free lines five days a week. They are available to answer all of your questions and can provide assistance with any ongoing support questions that you may have. This service is provided at no additional cost. Plan Technical Support Staff are available Monday through Friday, 8:30 a.m. to 7:00 p.m. Eastern Time, at (800) 695‑4952, option 1.

98966 Payroll Guide (11/15/2007) 10

Report Name Description Report Selection Parameters

Designated Age Report(KWAR)

This report provides a list of participants over a specified age as of the date entered.

• Division (if applicable)• Over What Age?• As of Date• Include Addresses (Yes/No)• Sort Order (Employee Name/SSN)

Employee Address Listing(KWEA)

This report provides a listing of each employee’s name, address and telephone number.

• Division (if applicable)• Selected Employees (All/Active/Terminated)• Details (Yes/No)

Contribution Limit Report(KWCL)

This report provides a list of participants who have exceeded the specified contribution dollar amount for the selected date range.

• Division (if applicable)• Limit Amount• Start Date• Ending Date• Sort Order (Employee Name/SSN)

De Minimus Balance Report (With Vested Account Balance)(KWDM)

This report provides a list for all or terminated participants with an account balance below the dollar amount specified.

• Division (if applicable)• Balance Amount• Balance Effective Date• Last Contribution Date• Employee Status• Disbursements (Yes/No)• Include Rollover Money (Yes/No)• Sort Order (Employee Name/SSN)

Employee Disbursement Report (KWDR)

Report shows participant disbursement information over a period of time that you specify.

• Division (if applicable)• Start Date• Ending Date• Sort Order (Employee Name/SSN)

Incomplete Data Report for Active Participants(KWIA)

Report displays individuals with missing or defaulted recordkeeping information.

• Division (if applicable)• Allocation Indicator (Y/N)

• Exclude employee records with no allocations• Include employee records with no allocations

• Sort Order (Employee Name/SSN)

Inactive Participant Report (KWIP)

Report lists those employees identified as being inactive.

• Division (if applicable)• Option

• Account Status Terminated• Awaiting First Deposit• Employment Term Date Is Present• No contr. received in 30 days• No contr. received in 60 days• No contr. received in 90 days• No contr. received in 180 days• No contr. received in 12 months• No contr. received in 18 months

• Sort Order (Employee Name/SSN)

Participant Data File (KWPE)

File contains participant-level information for a given group account.

(File produced is a “.csv” comma delimited file, which may be imported in Excel and other software programs.)

• Division (if applicable)• Asset Information (Yes/No)• Vesting Information (Yes/No)• Activity Information (Yes/No)• Loan Information (Yes/No)• Employee Compensation Info (Y/N)• Participant Data Breakdown

(Drop-down list of participant characteristics)

Participant Statement(KWST)

This creates a quarter-end statement for selected participants.

• SSN of Participant• Statement End Date

(Drop-down list of available statements)

PSC Reporting—Employee Reports

98966 Payroll Guide (11/15/2007) 11

Report Name Description Report Selection Parameters

Contribution Report (KWCR)

Report provides Plan contribution information by money source over the time specified.

• Start Date• Ending Date

Contribution Summary by Fund (KWCS)

Report provides a summary of Plan contribution information per investment option.

• Start Date• Ending Date

Participant Summary Report(KWPR)

Report provides a summary of participation statistics.

• Division (if applicable)• Start Date• Ending Date

Disbursement Summary Report (KWDS)

Report provides a summary of disbursement information.

• Division (if applicable)• Start Date• Ending Date

Plan Asset Report (KWGN)

Report provides Plan assets by money source and investment option for a selected date range.

• Division (if applicable)• Start Date• Ending Date

Asset Summary by Fund (KWAS)

This report provides a summary of Plan assets for a selected quarter-end date.

• Division (if applicable)• Statement End Date

(Drop-down list of available statements)

Trade Monitoring Report (KWTM)

This report displays trade activity for a specific fund and a specific date range.

• Investment Option• Start Date• End Date• Trade Monitor Indicator

PSC Reporting—Plan Reports

If you are unable to remit payroll electronically through the PSC and need to send your contributions using a report and check or wire, please contact your Implementation Specialist listed in the Great‑West Retirement Services cover letter for further instruction.

Payroll Remittance via Paper and Check

Great-West Retirement Services® refers to products and services provided by Great-West Life & Annuity Insurance Company and its subsidiaries and affiliates. Great-West Retirement Services® is a service mark of Great-West Life & Annuity Insurance Company. All rights reserved.

©2007 Great-West Life & Annuity Insurance Company Form# CB1096PYRG (11/2007)