Requesting Original or Corrected Determination Letters from the IRS

As a plan fiduciary, there is a very important letter that should be on file with your plan documents.  This letter is known as the determination letter.  The determination letter is a letter the IRS sends to you letting you know the tax status of your 401k plan.  This letter lets you as the plan …

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IRS Employee Plans Examination Process

In my previous blog, I discussed the oversight responsibilities of the IRS and Department of Labor over 401(k) plans, and what to expect if your plan is selected for an audit. One type of audit you may encounter is an IRS Employee Plan Examination, which is essentially designed to identify areas of noncompliance, develop corrective …

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Salary Deferral Election Time

It’s year end and time to update your contribution amounts for your 401(k) accounts for 2012.   Although the maximum catch up contribution amount didn’t change for 2012 (it’s still $5,500), the maximum amount of elective deferrals did increase by $500 from $16,500 to $17,000.  For a listing of other benefit limits for 2012 see this …

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Fee Disclosures – continued…

Remember the fee disclosure requirements that are coming soon…… well if done right, you can do this electronically.  The Department of Labor released technical release 2011-03 Interim Policy on Electronic Disclosure under 29 CFR 2550.404A-5.  This interim policy provides a safe harbor for electronic delivery of these disclosures and a means to set standards for …

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All About Blackout Periods

We recently had some questions about how blackout periods work, and I learned a lot by consulting some of our TPA (third party administrator) colleagues and the DOL website. A blackout period is basically a time that participants temporarily lose control of their retirement accounts.  During this period, no changes can be made to investment …

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Department of Labor and IRS Audits of 401(k) Plans

Federal oversight of 401(k) plans is essentially divided between the Internal Revenue Service and the Department of Labor. The IRS oversees the qualified status of 401(k) plans and issues determination letters. The DOL oversees fiduciary standards, reporting and disclosure requirements, and all other rules that do not affect the qualified status of 401(k) plans. Audits …

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Remitting Contributions Timely

The Department of Labor regulations states that employee contributions should be remitted to the plan as of the earliest date on which such contributions can reasonably be segregated from the employer’s general assets, but no later than the 15th business day after the end of the month from the date on which such amounts are …

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ERISA Violations – Litigation Happens

It’s that time of year again when employee benefit plan audits are gearing up so it’s also a good time for a reminder regarding the importance of ERISA compliance. Plan sponsors who have good oversight over their plans and have annual audits may tend to not keep apprised of legal proceedings involving benefit plans. Some …

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Census Basics and Ensuring Census Accuracy

The census is prepared by the plan sponsor on an annual basis and includes the social security number, name, date of birth, date of hire, number of hours worked during the year, date of termination (if applicable), yearly compensation (which needs to meet the definition of compensation in the plan document), employee contribution for the …

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