In today’s workforce environment, employees want and expect their employer to provide a retirement vehicle such as a 401(k) plan. When an employer implements a retirement plan, they are responsible for all administrative, regulatory and compliance oversight to ensure their employee’s plan financial wellness.
The employer, or Plan Sponsor, has fiduciary responsibilities set forth by the Employee Retirement Security Act (ERISA) and enforced by the IRS and Department of Labor. The DOL has stated that getting your fiduciary duties correct is challenging for employers, even more so for small to medium sized employers with limited time and resources.
Maintaining compliance can be difficult and as the fiduciary, you are held to the standard of an “Industry Expert”.
There are many reasons for retirement plan failure,
the most common reasons include:
• NOT FOLLOWING THE TERMS OF YOUR PLAN DOCUMENTS
• LATE CONTRIBUTIONS
• MISHANDLED ELIGIBILITY
• PROHIBITED TRANSACTIONS
• NOT FOLLOWING LOAN PROVISIONS
Oversight of QDROs consistent with
the terms of the plan
Documentation of the delivery of all notices to required recipients
Review of TPA and Record Keeper service performance using best practices
Oversight of all day-to-day administration of
Verify Summary Plan Document, Eligibility and Benefits are being administered in accordance of Plan
Ensure accuracy and timely filings
of Form 5500
Facts about your
• Company owners, CFOs and HR personnel are often considered plan fiduciaries
• Fiduciaries may be personally liable for any breach – there is no corporate veil of protection
• Most companies mistakenly believe they have fulfilled their fiduciary duties by hiring a Third Party Administrator (TPA)
• Your TPA may not be a fiduciary and therefore will not be held responsible for non-compliance and resulting penalties, fines and restorations. You are liable for the results of their work
• In 2017, 72% of audited plans were found delinquent, resulting in $1.11 billion in fines