In the event that a plan discovers a practice breach based on IRS or DOL regulations, they may be well advised to attempt to apply for one of the self-correction programs identified below. It is typically advantageous to self-correct prior to the error being discovered by the IRS or DOL, as penalties and consequences may … More IRS/DOL Plan Error Self-Correction Programs
Several events can trigger a DOL or IRS audit, such as employee complaints or self-reporting under the annual submission of the Form 5500. Often times an audit is a random event, which is why you should always be prepared. Listed below are several key items typically requested in an initial letter sent by the IRS … More Are You Ready for an Audit?
Giving Thanks to Plan Participants, Plan Sponsors and the DOL Thanksgiving is my favorite holiday. Lots of food, football, good cheer and you don’t have to buy presents. It is also a time to reflect and be thankful for the good fortune in our lives, and for those who love us or have helped us … More Giving Thanks to Plan Participants, Plan Sponsors and the DOL
A summary plan description (SPD) describes the key provisions of an employer’s retirement plan and participant rights. SPDs must be disseminated to newly eligible participants within 120 days after a new plan is established or within 90 days after a participant becomes eligible to participate in an existing plan. In addition, SPDs must be disseminated … More Summary Plan Description Reminder
At a recent Western Pension Benefit Council/ASPPA Conference the new Fiduciary Rule was reviewed. The new Fiduciary Rule (definition) has come under significant criticism by many industry groups and Congress, some of whom brought litigation to redefine and suspend the effect of this regulation. To date, the DOL shows no intent to revise their position … More ERISA Update
Last month we featured the first part of our Q&A series. Now enjoy the final five questions and wrap-up. After years of proposed regulation issuance, comment periods, drafting and anticipation, the Department of Labor (DOL) finally published final guidance regarding the definition of “fiduciary” on April 8, 2016. It is important for plan sponsors to … More “Conflict of Interest” or “Fiduciary” Rule: A Plan Sponsor’s Q&A – Part II
The payment of expenses by an ERISA plan (401(k), defined benefit plan, money purchase plan, etc.) out of plan assets is subject to ERISA’s fiduciary rules. The “exclusive benefit rule” requires a plan’s assets be used exclusively for providing benefits. ERISA also imposes upon fiduciaries the duty to defray reasonable expenses of plan administration. General … More Allowable Plan Expenses: Can the Plan Pay?
After years of proposed regulation issuance, comment periods, drafting and anticipation, the Department of Labor (DOL) finally published final guidance regarding the definition of “fiduciary” on April 8, 2016. It is important for plan sponsors to understand the reasoning behind, and the scope, of the final rules. The following Q&A is meant to assist you in understanding … More “Conflict of Interest” or “Fiduciary” Rule: A Plan Sponsor’s Q&A – Part I
What is “float”? Float refers to the earnings or “compensation” accruing to a service provider while a plan’s contribution remittance (or other assets held in suspense) is awaiting deposit or distribution. With many service providers, a contribution received after 2 p.m. EST will not be deposited until the next day. Any return on these remittances … More When “Float” is a Bad Thing
The Employee Retirement Income Security Act of 1974 (ERISA) holds fiduciaries to a standard of prudence when making investment-related decisions for a qualified ERISA plan. The Department of Labor (DOL) and the courts have largely determined that said standard of prudence can best be determined by a fiduciary’s process, or procedures, used in making such … More Investment Policy Statement Review: Beyond the Obvious