Borrowing from Your 401(k): What to Know Before Making the Decision

By Wiss, Posted in Employee Benefit Plan Audits

By Cindy Sandomenico Borrowing money from your 401(k) account can be tempting. You know the money is there, and it’s yours, so why not use it? Before you pull the trigger, however, consider the limitations and consequences. Here are some important points to keep in mind. Know the rules Generally, you can borrow from a 401(k) for any reason, such as paying educational expenses or buying a home for the first time -- although employers are not required to offer a loan option within the 401(k) plan.... read more.

How to Minimize Your Fiduciary Liability

By Wiss, Posted in Employee Benefit Plan Audits

By Craig Erickson Those with discretionary authority or administrative control over their organization’s retirement and 401(k) plan face significant risks. If fiduciaries make decisions that negatively affect plan participants or beneficiaries, they can be held personally liable for breaching their fiduciary duties, even if the action was unintentional. Although fiduciaries cannot entirely eliminate the risks associated with their role, there are several things they can do to protect themselves and... read more.

What the DOL Looks for During an Audit

By Wiss, Posted in Employee Benefit Plan Audits

By Craig Erickson  You’ve just learned that the Department of Labor’s Employee Benefit Security Administration has selected your company’s retirement plan for an investigation. Are you and your plan prepared for an audit? The DOL typically doesn’t provide much notice before beginning an audit, which can last several days, weeks or longer. However, in advance of starting, you will receive an investigation notice that includes a list of documents its people will want to review w... read more.

What Type of 401(k) Plan Document Do I Have and When Do I Need to Update it?

By Wiss, Posted in Employee Benefit Plan Audits

By Craig Erickson When you establish your company’s 401(k) plan, you have to make a range of decisions, from the type of plan and investment tools you’ll offer to participation requirements and guidelines. Once you’ve done this, you need to put it in writing. This is your plan document, a mandatory part of your plan that details its provisions and clearly communicates them to participants. There are three levels of plan documents: Prototype. This off-the-shelf version of a plan docum... read more.

When 401(k) Loans are Considered to be in Default

By Wiss, Posted in Employee Benefit Plan Audits

By Laura Zindel Taking out a 401(k) loan can seem like a relatively simple way to borrow money. It is a very common practice, but many employees who borrow from their plans aren’t prepared for the financial consequences of doing so if a loan ends up in default. The most common reason for defaulting on a 401(k) loan is the loss of a job. If the employee loses his or her job, the plan document rule requires that any outstanding loan balance must be repaid within a certain timeframe, based on when the... read more.

How IRS Revenue Protocol 2016-37 Will Impact Retirement Plans

By Wiss, Posted in Employee Benefit Plan Audits

By Cindy Sandomenico  Approved in June 2016, IRS Revenue Protocol 2016-37 alters the way individually designed retirement plans must file amendments and submit determination letters to the IRS. This will be effective Jan. 1, 2017. Previously, retirement plans were subject to a five-year cycle involving remedial and formal adoption of amendments, and submission of determination letters every five years, regardless of whether the plan was amended. This process was time-consuming for both plan sponsors... read more.

How Proposed Changes to Form 5500 Could Impact Your Filing Requirements

By Wiss, Posted in Employee Benefit Plan Audits

By Dewang Sanjanwala  If your company has an employee benefit plan, you should be familiar with IRS Form 5500, the form you use to report activity regarding your retirement and welfare plans. On July 11, 2016, the U.S. Department of Labor (DOL) proposed revisions to Form 5500 and the related schedules in an effort to promote more thorough monitoring of plans by employers, fiduciairies, participants and, of course, the DOL. Here are some of the changes and how they could significantly increase the ann... read more.

How to reduce risk using fidelity bonds and fiduciary liability coverage

By Wiss, Posted in Employee Benefit Plan Audits

By Craig Erickson  Managing an organization’s employee benefit and retirement plan comes with risks, and potential missteps can affect both the plan administrator and participants. To protect you from those risks, insurance companies offer fiduciary bond — often called fidelity bond — and fiduciary liability coverage. And while the two terms sound similar, there are distinct differences.  Assets and administrators at risk The plan administrator can act, or fail to act, in ways... read more.

What’s your Responsibility to Find Missing 401(k) Plan Participants?

By Wiss, Posted in Employee Benefit Plan Audits

By Craig Erickson  As the fiduciary of a 401(k) plan, you are responsible for retirement plan participants, even if they’ve left your company with no forwarding addresses or you have contact information that’s no longer valid.   If employees work at your company long enough to take part in your 401(k) plan, and then disappear, moving from state to state, taking a series of jobs,  how responsible are you for tracking them down?  When a participant cannot be located via rout... read more.

What to Look for When Hiring a 401(k) Plan Auditor

By Wiss, Posted in Employee Benefit Plan Audits

By Craig Erickson  As the number of participants in your company’s 401(k) plan grows, at some point the plan will require an audit. Also known as an employee benefit plan (EBP) audit, the U.S. Department of Labor generally requires one when the number of participants in your employee benefit plan reaches 100, though there are some exceptions.  This audit, a result of the Employee Retirement Income Security Act of 1974, assesses whether an employer’s plan has the liquidity to meet cur... read more.

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