Most of the retirement plan coverage in the mass media is about bad things happening to employees or some aspect of the Pension Protection Act of 2006. So it’s always good when a writer points out to plan sponsors that they have certain obligations in managing their retirement plans and the problems to avoid.
Marc Miller does exactly that in his article, Business Owners Beware of Retirement Plan Pitfalls, that appeared recently in the Oroville California Mercury Register. Mr. Miller cautions business owners to:
- Retain plan records
- Distribute employee notices
- Make prudent investment choices
- Make timely salary deferral deposits
All basic, of course, and I am sure not intended to be all-inclusive. So in light of increased compliance activity by the regulatory agencies, here are a few other areas to which plan sponsors should pay special attention.
The Department of Labor which oversees fiduciary, reporting, and disclosure aspects of retirement plans has a special focus on these two areas:
- Timely salary deferral deposits. No, not a word processing glitch, but to emphasize again the importance of remitting employee contributions to 401(k) providers as soon as possible.
- Fees paid by a retirement plan.
The Internal Revenue Services which oversees the tax aspects of retirement plans has a special focus on these four areas:
- Discrimination testing.
- Plan loans.
- Military leave issues.
And one issue becoming increasing important – security of retirement plan data.