Keeping your plan in compliance

Offering a retirement plan can be one of the most challenging, yet rewarding, decisions an employer can make. However, as a Fiduciary you have important responsibilities and are subject to certain standards of conduct because you are acting on behalf of participants in a retirement plan and their beneficiaries. Failure to comply can result in hefty penalties. These responsibilities include:

  • Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;
  • Carrying out their duties prudently;
  • Following the plan documents (unless inconsistent with ERISA);
  • Diversifying plan investments; and
  • Paying only reasonable plan expenses.

Fiduciary responsibility goes beyond making sure that your plan is compliant per the Department of Labor requirements. Meeting DOL Compliance doesn't necessarily mean that you have a "successful plan", either. Additionally, some simple questions to ask to ensure compliance might be:

  • Is your fidelity bond sufficient?
  • How are you monitoring your target date funds?
  • Does your plan have a qualified default investment alternative?
  • What is safe harbor?
  • Is your plan for 404(c) compliant? Compliance with 404(c) is optional, but compliance offers employers the assurance that they will avoid personal liability for any losses resulting from an employer's investment decision.
  • Failure to comply with 404(c) simply means the employer is not insulated from liability. Please contact us to learn more about the requirements to comply with 404(c).
  • What are your 5500 filing requirements?
    How are you approaching your audit? Does your auditor specialize in 401k plans? Not every auditor has the experience or assurance background in qualified plans.
    Do you understand your 3(16) relationships?

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