With the ever changing regulatory landscape surrounding employee benefit plans, it’s important that the plan sponsor consider the impact of regulatory changes. As discussed in previous blogs, there are a significant number of fiduciary responsibilities bestowed upon a plan sponsor. One of these responsibilities is to keep the plan in compliance with all current laws and regulations. Since the laws and regulations governing employee benefit plans can change from a multiple number of sources, including the Internal Revenue Service and ERISA, amongst others, it is important that the plan sponsor have regular communication with its plan attorney to determine any plan amendments that need to be made.
Plan amendments decrease the administrative burden of redrafting entire plan documents and should be seen as a necessary requirement under any employee benefit plan. They not only keep the plan current with laws and regulations but also are used to document and communicate changes in the plan elected by the plan administrative committee. However, as plan amendments become substantial, plan sponsors may need to consider incorporating and redrafting all plan documents in order to incorporate the amendments in simple, easy to understand documents. Until such time, the plan sponsor should formally approve all plan amendments and communicate these amendments to plan participants in a timely fashion.
Jonathan Poppel, CPA