Target Date Funds

Does your plan have target date funds (TDFs)? Are you doing enough in managing those investments as the plan fiduciary? Let’s see what the Department of Labor (“DOL”) says about these funds. The DOL has general guidance on the selection and monitoring of TDFs. With many plan sponsors making these TDFs available to participants, it …

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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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Does Your EBP Have a True-Up Provision?

Plan sponsors have an option to incorporate a true-up provision into their employee benefit plan(s). True-up adjustments are done at the end of the plan year in order to ensure that the amount of employer matching contributions is grossed up to maximum allowable benefit per the plan document; they protect the less savvy participants from …

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Do I need an audit?

As a sponsor of an employee benefit plan, along with annual reporting requirements, you may be required to undergo an audit of your plan’s financial statements. What are the reporting requirements and what triggers an audit? This varies depending on the type and size of the plan you sponsor. One participant plans (a business owner …

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Supreme Court Rules that Plan Sponsors Have Duty to Monitor Investment Options

On May 18, 2015, the U.S. Supreme Court issued its opinion in the Tibble v. Edison Int’l case. In 1999 and 2002, Edison International added 6 retail mutual fund options to the available investment options for the company’s 401(k) plan. All 6 mutual funds had virtually identical institutional-class mutual funds that charge lower investment fees. …

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Exploring Roth In-Plan Conversions

Brief History The Economic Growth and Tax Relief Reconciliation Act of 2001 authorized the establishment of Roth 401(k) accounts beginning January 1, 2006, which are post-tax retirement account. The next big thing to happen to Roth accounts was the American Taxpayer Relief Act of 2012, which opened the doors to in-plan Roth conversions. Effective immediately …

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Plan Corrections Necessary? DOL Corrections Program

If your company offers an employee benefit plan that is subject to the Employee Retirement Income Security Act (“ERISA”), for example a 401(k) plan, it is important to remember that your Company is responsible for ensuring that the Plan and any plan transactions comply with the fiduciary standards ERISA has created. Even though a Plan …

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ERISA Accounts – Plan Assets?

Employee benefit plans are seeing increased regulation and disclosure of plan fees including new disclosures of compensation paid to covered service providers in July 2012 (http://www.hhcpa.com/blogs/employee-benefits-audit-services/fee-disclosure-regulations-for-covered-service-providers/). The result of the new fee disclosures and oversight by plan fiduciaries is that record-keepers are expanding their offering of expense accounts, typically known as an ERISA Account, to …

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401(k) and 403(b) Plans to Disclose Fees Charged to Participants

If you’re like most people, it’s not easy to determine exactly how much you’re being charged for your employee benefit plan fees.  Some expenses are disclosed on your statement, but some are not.  Instead, they’re deducted from earnings, and only the net earnings amount is shown.  New rules issued by the DOL last week will …

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Implementing an Investment Policy

Making sound investment-related decisions for an employee benefit plan is an essential part of fiduciary duty.  A good investment policy provides a roadmap for a fiduciary agent of where the plan is expected to go.  By providing clear procedural guidelines, plan sponsors can make better decisions related to the selection and ongoing monitoring of investment …

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