6.3.4 Employee Benefit Plans (EBP)

Under this ORC, all the defined benefit plans and defined contribution plans that are not self-directed are covered.

A defined benefit plan is one where the employer aggregates money in a retirement account and arranges to pay employees a fixed monthly payout during retirement, or mostly referred to as a pension.

A defined contribution plan, like 401(k), requires employees to put in their own money into the retirement accounts. The employer may also make contributions on a regular basis. Future benefits in this type of plan are subject to investment fluctuations. Defined contribution plans that are not self-directed are covered in this ORC.

Overfunding amounts are computed by the Application by taking into consideration the Total Allocation Percentage of all the employee benefit plan participants associated with an Employer. If the Total Percentage is less than 100%, it is determined that there is Overfunding in the deposit account. This amount does not belong to any participant and instead belongs to the Employer.

All Overfunding amounts for an Employer are aggregated and receive a separate SMDIA under EBP ORC.