Avoid Common Errors: Monitor and Understand Your Retirement Plan
Posted 8-11-2011 | By Christine Bentson | Download Article
With the complexities of administering retirement plans, there are many commonly made errors that can easily be avoided with the right systems and processes in place. Businesses need to consistently monitor rule and regulation changes, or hire a professional to keep their retirement plan in compliance. To avoid penalties and common mistakes found in retirement plan audits, below are a few reminders.
1) The Department of Labor enforces timely deposits of employee contributions to retirement plans. Plan sponsor contributions for small plans (less than 100 participants) are considered timely if they are remitted as soon as possible but in no event later than seven business days from the date they can be segregated from the employer's general assets (i.e. withheld from the employee's wages). Large plans (100 or more participants) are required to deposit as soon as possible after withholding. Any contributions after this timeline subject the plan's fiduciaries to liability.
2) Make sure to understand and follow retirement plan terms set forth regarding eligibility, compensation, allocations, vesting and distributions.
3) File the required Form 5500 Annual Return/Report of Employee Benefit Plan each year by the required due date.
4) Make sure your plan documents are being monitored and amended for all required restatements as well as any single plan amendments that may become effective on a year-by-year basis.
To avoid many of these common mistakes, retirement plans required to have an independent audit completed should seek a professional audit firm with retirement plan audit experience.
Please contact Christine Bentson, CPA, RPA, CEBS, with any questions, or to help with plan administration, plan audits, or plan compliance at cbentson@hlbtr.com or 651-407-5808.