How to Prepare for Your 401(k) Audit

There are a few simple steps that can be taken during the planning phase of the audit in order to gain efficiencies during the fieldwork phase. You should be in communication with your auditor before the Plan’s year-end date. This is the best time to come to an agreement about the terms, timing and fees …

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DOL Fiduciary Rule

The Department of Labor (“DOL”) has been working on revisions to the current “Fiduciary” Conflict of Interest Rule for multiple years but on April 8, 2016, the DOL’s final rule was posted to the Federal Register which is effective June 7, 2016 and applicable beginning April 10, 2017. The rule now defines who is a …

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Forming a 401(k) Plan Committee

As a Plan Sponsor, you have important fiduciary responsibilities which, according to the Employee Benefits Security Administration (“EBSA”) within the Department of Labor (“DOL”), include: Acting solely in the interest of plan participants and their beneficiaries Carrying out duties prudently Following the plan documents (unless inconsistent with ERISA) Diversifying plan investments Paying only reasonable plan …

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Plan sponsor record retention guidelines

As plan auditors we are frequently asked how long documents relating to a plan should be retained by the plan sponsor. Like anything related to the Internal Revenue Service (IRS), there is no one simple answer. Before discussing some general guidelines on record retention, let’s discuss some general responsibilities of the plan sponsor to operate …

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Required Minimum Distributions

Required minimum distributions (RMDs) are minimum amounts certain participants (or retirement account owners if the participant has passed) must take as distributions from their account on an annual basis. Generally, RMDs begin the year in which the participant reaches the age of 70 ½ or the year in which the participant retires, provided they are …

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The Importance of Knowing Your Plan’s Definition of Compensation

As I reflect on my last 401k audit season, I remember running into some operational issues that were a result of plan administrators not using the correct form of compensation, as defined by their plan document, while calculating employee and employer contributions. Using the correct form of compensation while making contributions is important because if …

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Dear Plan Sponsors: Reviewing a SSAE 16 Report

What is a SSAE 16 report anyway? SSAE 16 stands for Statement on Standards for Attestation Engagements No. 16, Reporting on Controls at a Service Organization, and was finalized in January 2010 by the Auditing Standards Board of the AICPA. SSAE 16 replaced SAS 70 as the authoritative guidance for reporting on service organizations. The …

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How to Handle a Blackout Period

What is a blackout? A blackout is a period of three or more consecutive business days during which participants’ are temporarily limited in or restricted from the ability to perform the following activities: Directing or diversifying investments Obtaining distributions Obtaining loans What actions must Plan Administrators take in order to remain in compliance during a …

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Participant Loans – IRS Requirements

If you participate in your Company’s 401k Plan, you are probably already aware that your Plan may offer an option for you to take out a loan from your 401k balance. These loans are tax free and typically require you to pay your loan back plus interest over a certain period of time. There are …

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Investment Policy – Why and What to Include?

An investment policy is created by an investment committee (those charged with making investment decisions for a retirement plan) to help establish and record its own policies in order to assist in future decision-making or to help maintain consistency of its policies by future committee members/trustees or to clarify expectations for prospective money managers who …

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