IRS/DOL Plan Error Self-Correction Programs

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 be significantly more severe. IRS Self-Correction Programs Plan errors can … Continue reading IRS/DOL Plan Error Self-Correction Programs

Are You Ready for an Audit?

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 or the DOL in connection with a retirement plan audit. … Continue reading Are You Ready for an Audit?

Waiver of 60-Day Rollover Requirement

The Internal Revenue Service (IRS) allows distributions to be excluded from income if they are rolled over to an eligible retirement plan or Individual Retirement Account (IRA) within 60 days. Revenue Procedure 2016-47 offers additional guidance, as well as a self-certification process that details how a taxpayer could accomplish a rollover that does not meet the 60-day requirement under certain circumstances. Conditions for Written Self-Certification … Continue reading Waiver of 60-Day Rollover Requirement

Organizing Your Fiduciary File

As a plan sponsor and fiduciary of your company’s retirement plan, keeping an up-to-date fiduciary file is critical. To begin, we recommend preparing your file in four key sections; contents of each section could include the following: I. Documents: plan document, IRS determination letter, summary plan description, investment policy statement, 404(c) policy statement and notice, form 5500s; service provider contracts; nondiscrimination test results, corporate tax returns, corporate board … Continue reading Organizing Your Fiduciary File

IRS

Pass or Fail? Corrective Actions to Remedy Your Test Results

Each year you receive a “pass” or “fail” from your service provider regarding required non-discrimination testing (the Actual Deferral Percentage test and the Actual Contribution Percentage test). The ADP/ACP tests govern the amounts of deferrals and/or matching contributions that highly compensated employees (HCEs) are allowed to make or receive in relation to those of non-highly compensated employees (NHCEs). If you received a “fail” do not panic. … Continue reading Pass or Fail? Corrective Actions to Remedy Your Test Results

Actual Deferral Percentage, Actual Contribution Percentage

Pass or Fail? Corrective Actions to Remedy Your Test Results

Each year you receive a “pass” or  “fail” from your service provider regarding required non-discrimination testing (the Actual Deferral Percentage test and the Actual Contribution Percentage test). The ADP/ACP tests govern the amounts of deferrals and/or matching contributions that highly compensated employees (HCEs) are allowed to make or receive in relation to those of non-highly compensated employees (NHCEs). If you received a “fail” do not … Continue reading Pass or Fail? Corrective Actions to Remedy Your Test Results

IRS, Audit

Are You Ready for an Audit?

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 or the DOL in connection with a retirement plan audit. … Continue reading Are You Ready for an Audit?

Retirement Plan, Funds, Forfeiture Dollars

Preparing for a Partial Plan Termination

The IRS is actively pursuing plans that may have experienced a partial plan termination. A partial plan termination may have occurred if you have experienced a substantial reduction in your workforce. Information on your Form 5500 filing may indicate a possible partial plan termination and may cause the IRS to investigate to ensure that proper procedures are being followed. The determination of a partial termination … Continue reading Preparing for a Partial Plan Termination