Step 1:

One thing that concerns me most when I do a plan audit is the liability of the plan sponsor. So, in the next few posts, you’ll get information about how to reduce your exposure and liability with plan participants, the Department of Labor and the IRS.  The first step is to take a look at the way the plan is structured – whether it’s brand new or has been in place for years. Read the rest of this entry »

We live in a litigious world. And, unfortunately, 401(k) plan sponsors are a ready target for litigation when benefit plans don’t measure up to expectations. Proper plan administration gives clarity to plans and can help avoid litigation. Here are a few prudent procedures:

• Establish a plan administrative committee – Make sure that all members of the committee are familiar with the plan documents. Established regularly scheduled meetings and keep records of the discussion.
• Appoint fiduciaries to monitor the plan – You’ll need appointing fiduciaries as well as plan fiduciaries. Those who appoint members should not manage the plan, and all members need to be covered by ERISA fiduciary liability insurance. Provide training to fiduciaries, especially when there are changes in ERISA laws.
• Review plan performance as well as the performance of the fiduciaries – At least annually, review investment policies and agreements with outside fiduciaries. Consider hiring an outside investment consultant periodically.
• Stay on top of plan-related fees – Get full disclosure from all vendors and communicate fees to employees.

A well run plan has a positive impact on your company, employees and you both now and in the future. And, a well-run plan is easier to audit, saving your company money in audit fees.

A failure to timely remit contributions and loan repayments

Read the rest of this entry »

Problems with Discrimination Read the rest of this entry »

Read the rest of this entry »

The financial crisis made participants apprehensive about looking at their statements.  However, with a wave of retiring baby boomers around the corner, you need documents to prove that you managed plan investments prudently.  You definitely do not want retirees to try to hold you personally responsible for their retirement fund.

Read the rest of this entry »

Get Moving Now!

The wide gap between the regulatory requirements for 401(k) and 403(b) plans is about to disappear. It’s important to take effective measures now to prevent regulators from cutting into your wallet. And, you don’t want to ignore the IRS. The new requirements issued July 24, 2007 apply to ALL 403(b) plans.  Fortunately, the extra requirements, while burdensome, are not insurmountable.

Read the rest of this entry »

You have a fiduciary responsibility to ensure that plan fees are reasonable as a plan sponsor. The best practice for meeting this fiduciary obligation is to go shopping. Ask a variety of potential vendors the same questions about what they charge for the services they provide. Obtain bids from the most promising vendors and chose your favorite.

Read the rest of this entry »