Plan Terminations and Partial Terminations

Employers are allowed to terminate 401K benefit plans offered to employees for a variety of reasons. Employers are not required by law to provide retirement savings plans, and can terminate them as a part of a bankruptcy or merger, in order to switch to another type of plan, or voluntarily terminate the plan. According to …

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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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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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Compliance for Small Company Employee Benefit Plans

As another employee benefit plan season draws to a close, I was reflecting on the many compliance errors that we find each year while auditing plans. The plans that require audits are typically larger employers with over 120 employees. These plans are typically administrated by professionals with significant experience in their fields. And yet, due …

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401K Pre-Approved Plans 2016 Deadline

Some employee benefit plans are set-up as pre-approved plans. Typically this includes prototype and volume submitter plans. This basically means that the plan is operating under a Plan Document from a financial institution, adviser or similar provider that has requested IRS opinion or advisory letters on the tax status of the Plan. These types of …

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Compliance Testing Failures – Now What?

Hearing the news of a compliance testing failure sounds rather daunting. The severity of a compliance testing failure varies by case, and correcting it may not be as difficult or costly as it sounds. Throughout compliance testing, traditional 401(k) plans must be tested to ensure that contributions made by and for nonhighly compensated employees (“NHCE”) …

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