401(k) Administrative Services Terms

Updated February 8, 2024

1. Introduction. Client understands and agrees that the Administrative Services Terms govern all aspects of Client’s relationship with Betterment for Business LLC (“B4B”) and are incorporated by reference in the Betterment at Work Master Services Agreement (“MSA”).

2. The Program; Scope of Services. Client is joining the Program whereby Client is engaging B4B to provide Administrative Services to the Plan on the terms and conditions described herein. If Client is transferring benefits from another plan, Client is directing B4B to establish a successor plan.

3. B4B Fiduciary Status. Client acknowledges and agrees that the named plan administrator in the Plan delegates to B4B the responsibilities set forth in this provision. Such responsibilities are hereby delegated to B4B upon the execution of the Services Agreement. Such delegation shall terminate upon the bankruptcy of Client, the cessation of ongoing business activities by Client, the abandonment of the Plan, or the termination of the Services Agreements. B4B will act as a Fiduciary to the Plan when performing the following functions to the extent that any such function is one that is required to be performed by the plan “administrator” as that term is defined in Section 3(16) of ERISA:
    1. Advising Client on Plan design and administering Plan design changes;
    2. Preparing Plan documents and any amendments thereto;
    3. Preparing the annual Form 5500 and audit reporting package with trustee certification;
    4. Integrating with a Third-Party Vendor that provides payroll services (if applicable) or otherwise receiving payroll files from Client in a format and manner prescribed by B4B;
    5. Maintaining data files on each employee;
    6. Determining eligibility of rollover contributions; 
    7. To the extent that Client directs B4B to establish and maintain an integration with a Third-Party Vendor that provides payroll services, processing contribution calculations, including but not limited to employer matching contributions and non-elective contributions (if applicable);
    8. With respect to annual required minimum distributions, identifying Participants required to take such distributions based on information supplied by Client and timely processing required minimum distributions;
    9. Preparing Participant communications regarding the Plan;
    10. Preparing and performing nondiscrimination testing annually, as set forth in further detail in the Statement of Work, including proposing necessary remediation for review by Client, if necessary;
    11. Calculating and processing corrections related to Code Section 402(g) and 401(a)30 salary deferral limitations, if applicable; and
    12. Processing Participants’ involuntary distributions under Code Section 411(a)-(11) (otherwise known as force-out distributions) hereby authorized by Client.
4. Plan Administrator Responsibilities. Notwithstanding the delegation of responsibilities set forth above, Client acknowledges and agrees that the Plan will name an “administrator” within the meaning of 3(16) of ERISA other than B4B, and that Client will be responsible for all duties and obligations pertaining to the Plan and the administration thereof other than those duties and obligations expressly delegated to B4B pursuant to these Administrative Services Terms, including but not limited to:
    1. Executing the Plan document and any amendments thereto; 
    2. Executing all reports or documents required in connection with the Plan, including but not limited to signing and filing the Form 5500 annually; 
    3. Providing and posting all notices and disclosures as required by ERISA, consistent with e-delivery rules;
    4. Representing the Plan before any governmental or regulatory authority; 
    5. Acquiring and maintaining appropriate bond coverage for the Plan;
    6. Reviewing and approving Participant loan and distribution requests, including ensuring that any loan request presented to the Plan complies with the Plan’s loan provisions and applicable Treasury and Department of Labor regulations; 
    7. Ensuring that any Participant loan repayments are made in a timely manner; 
    8. Promulgating procedures to qualify and process domestic relations orders; and
    9. Reviewing and approving: (i) the results of annual compliance testing, including any proposed corrective actions; (ii) any remediations or corrections related to Code Section 402(g) and salary deferral limitations set forth in Code Section 401(a)(30); and (iii) required minimum distributions.

5. Errors. Client shall immediately notify B4B if it discovers an error in B4B’s provision of Administrative Services and shall use reasonable efforts to mitigate the damages caused by the error to the administration or operation of the Plan. In the event of an immaterial error, or an error not due to the fault of B4B, B4B shall have no obligation to correct the error, except to the extent Client retains B4B to correct the error. B4B shall have no liability for any losses to the Plan that result from the correction of such errors. Upon the Client’s request, B4B will provide a good faith estimate of the cost of the service. B4B will correct trading errors directly caused by its provision of services that are brought to its attention promptly. B4B will make the Plan whole for losses incurred by the Plan solely due to B4B’s error in processing plan transactions. 

6. Client Instructions. All Administrative Services provided by B4B under the Administrative Services Terms shall be based on the instruction of, and any information, data, document, or instrument supplied by, a Client Representative, Third-Party Administrator, or by a Third-Party Vendor, if Client directs B4B to implement any Third-Party Integration. If B4B rejects instructions or directions from a Client Representative, Third-Party Administrator, or by a Third-Party Vendor, B4B shall notify Client of such rejection and provide Client with a description of the reasons therefor. If and to the extent that B4B, or any of its representatives, act or fail to act solely as a result of, or solely based upon, any direction or lack of direction from a Client Representative, Third-Party Administrator, or a Third-Party Vendor, B4B and its representatives will be relieved of any liability arising therefrom, and such act or failure to act shall not constitute a breach or non-performance of any obligation of B4B under the Administrative Services Terms. Moreover, B4B and its representatives may, but are not required to, perform functions that fall within the Client’s responsibility pursuant to Section 4 above upon providing Client with reasonable notice. Client understands and agrees that failure to respond within the timeframe specified by B4B in its notice will constitute agreement to and acceptance of B4B’s proposed course of action. Client agrees to indemnify and defend B4B and hold B4B harmless against any claims, judgments, settlements, or other liabilities or costs of defense or settlement relating to B4B’s performance consistent with this provision of an obligation that is within the scope of Client’s responsibility. 

If Client directs B4B to establish and maintain an integration with a Third-Party Vendor that provides payroll services, such integration will be subject to the Payroll Integration Terms (www.betterment.com/legal/work/401k-payroll-integration-terms), which are incorporated herein by reference. Additionally, in the event B4B agrees to undertake certain concierge payroll services, such services will be subject to the Payroll Concierge Services Terms (www.betterment.com/legal/work/401k-payroll-concierge-services).  Client understands and agrees that B4B’s calculation of Participant eligibility and entry shall be for informational purposes only and does not constitute a final determination. Client further understands and agrees that B4B is not responsible for notifying Client of any missed payroll dates and will process only payroll integration data that B4B receives from the Third-Party Vendor. Client further understands and agrees that B4B will use certain default settings when implementing a payroll integration, including but not limited to designating all participants as “wired at work” in accordance with applicable Department of Labor regulations. Client understands and agrees that B4B may apply additional default settings if particular data fields are unavailable. B4B will not be liable for Client for any Losses incurred by Client resulting from B4B’s use of any such default settings. 

B4B will notify and request a direction from Client in the event that B4B receives wire transfers or residual dividends that lack accompanying data sufficient to identify the applicable Participant Account. Client understands and agrees that Client’s failure to respond within the timeframe specified in Betterment’s notice shall constitute consent to B4B’s proposed course of action with respect to such funds, which may include distributing the funds pro rata among Participant Accounts.

7. Reports and Records. Client shall be solely responsible for maintaining complete, accurate and current Plan documents and records as required by applicable law. B4B may maintain Plan documents and records electronically. After termination of this Agreement, B4B shall retain such records pertaining to the Plan as it deems appropriate for six years, and during such period shall allow Client the opportunity to obtain copies at Client’s expense. After such period, B4B may destroy records pertaining to the Plan without notice to any person. 

8. Fees. A list of services as well as B4B’s fees and charges for the delivery of such services under the Administrative Services Terms are set forth in the B4B Statement of Work.