Do your Annual Retirement Plan Check-Up today!
Kimberly A. Reed
Principal, CPA
12 June 2017
It is always a good idea to conduct an annual review of your employee benefit plan. The Internal Revenue Service (IRS) has established and provided multiple resources for plan sponsors to help educate them on the best practices for employee benefit plans. They have created checklists for a variety of plans (401(k), 403(b), SEP, etc.) that are published on their website. It is highly recommended that plan sponsors utilize the resources provided since spending just a few minutes now could save you a huge headache later.  Listed below are just a few of the items addressed on these checklists. If the answer to any of these questions is “No”, you may have an issue in your plan and we recommend that you give either us or your ERISA attorney a call.

401(k) Plans:

1. Has your plan document been updated within the past few years?
2. Is the plan definition of compensation for all deferrals and allocations applied correctly?
3. Were all eligible employees identified and given the opportunity to make an elective deferral?
4. Have you timely deposited employee elective deferrals?
5. Was Form 5500 filed?

403(b) Plans:

1. Are the plan operations based on the terms of the plan document?
2. Have all the organization’s employees been given the opportunity to make a salary deferral to the plan?
3. Are total contributions limited to comply with tax laws?
4. Are you and your 403(b) vendors enforcing participant loan repayments and limiting aggregate loan amounts?
5. Are you and your 403(b) vendors requiring evidence that hardship distributions meet the plan hardship definitions and requirements?

Employee Benefit Plan Check-List
The following are common errors seen by the IRS:
• Not covering the proper employees
• Not giving employees required information
• Not depositing contributions timely
• Not following the terms of the plan document
• Not limiting employee deferrals and employer contributions to the proper maximum limits
If you make mistakes with respect to your plan, you may use the IRS Employee Plans Compliance Resolution System (EPCRS) to remedy your mistakes. There are three ways to correct mistakes under EPCRS. The Self-Correction Program permits a plan sponsor to correct certain plan failures without contacting the IRS or paying any fee. The Voluntary Correction Program permits a plan sponsor to, at any time before audit, pay a fee and receive IRS approval for correction of plan failures. The Audit Closing Agreement Program permits a plan sponsor to pay a sanction and correct a plan failure while the plan is under audit.For more information or to see a full listing of the

For more information or to see a full listing of the IRS checklist questions listed above, please feel free to contact us or visit:  https://www.irs.gov/retirement-plans/have-you-had-your-retirement-plan-check-up-this-year

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