Year End Housekeeping Reminders for Qualified Retirement Plans
Is the coverage sufficient? ERISA requires that plans have coverage of at least 10% of the plan's assets or $500,000 (whichever is less).
Plans with more than 100 eligible participants (whether they are deferring into the plan or not) are generally required to engage an independent auditor to audit their 401(k) plan. The number of participants is taken on the first day of the plan year, so if your plan is a calendar year plan and had more than 100 eligible participants on December 31, you may need an audit for the following plan year.
Payroll processing of elective deferrals and loan repayments
Did you transmit elective deferrals and loan repayments to the trust within the time frames outlined within your policies and payroll procedures? The Department of Labor requires that elective deferrals and loan repayments be sent to the trust as soon as administratively feasible. If you determine that you have some late contributions the Department of Labor provides a set of procedures to correct and report the failure.
Have there been any mergers or acquisitions during the plan year? Generally, there is a one year period in which an acquired plan may be disregarded for the purposes of plan testing.
Tim Thurston, AIF®
Manager, Retirement Plan Services
Tammy Woodman, QKA
Defined Contribution Consultant
The information provided is for educational purposes only. This information is from sources we believe to be reliable, but we cannot guarantee or represent that it is accurate or complete. The opinions are those of the writer, and the opinions and information presented are subject to change without notice.