Internal Revenue Service May 1, 2015 Page 4 of 4 In addition, the Service took a position in the newsletter that plan sponsors could not rely on “electronic self-certification” to document that the proceeds of a loan would be used to purchase a principal residence. For the reasons stated above regarding certification of the nature of a participant’s hardship, similar appropriate internal control processes could be established allowing a plan administrator to reasonably approve a loan term in excess of five years. Both the substantiation of hardship distributions and primary residence loans present similar administration concerns, and we believe that the substantiation of primary residence loans should be included on the Service’s Priority Guidance Plan for 2015-2016. Finally, although the newsletter does state that records for loans may be kept in “electronic format,” our members are concerned that the newsletter overall leaves the impression that electronic processing of loans is disfavored. For example, loan notes are often executed electronically.

We recommend the Service clarify that electronic loan processing, if consistent with applicable law, is acceptable. Record Retention The newsletter suggested that a plan sponsor must keep records of hardship and loan substantiation independent of the plan’s recordkeeper or third party administrator. We believe that the Service was merely trying to make the uncontroversial point that a plan sponsor, who is typically the named plan administrator, is ultimately responsible for compliance with the plan document and the Internal Revenue Code. Unfortunately, the language in the newsletter states repeatedly that a plan sponsor must retain records.

We are aware of no authority for such a position, which is contrary to accepted practice and would significantly increase costs of offering a plan. The Service should clarify its position. * * * * * The substantiation of hardship distributions and the documentation requirements for principal residence loans are critical components to properly administering plans for tens of millions of participants, and as a result, we respectfully request that they be included in the 20152016 Priority Guidance Plan. The SPARK Institute and the American Benefits Council appreciate the opportunity to provide these comments to the Treasury Department and the Service. If you have any questions, please contact us or Michael Hadley, Davis & Harman LLP (mlhadley@davis-harman.com, 202347-2210). Sincerely, Robert G.

Wuelfing Executive Director The SPARK Institute, Inc. Lynn Dudley Senior Vice President Global Retirement & Compensation Policy American Benefits Council .