A Checklist for Plan Sponsors

How the Plan Is Presented

Participation

The more convinced employees are of the wisdom of saving for retirement, the greater the level of employee participation. The greater the participation, the more the plan can benefit employees, including highly compensated employees. Regular meetings, newsletters, and handouts are effective means of communicating plan advantages.

 

Administration 

Summary annual reports must be distributed to participants within nine months after the close of the plan year. If a plan receives an extension to file its annual report (Form 5500) with the IRS, then the summary annual report must be distributed within two months after the end of the extension. Check to make sure printed materials are up to date and easy to understand, and distribute them. Participants and beneficiaries must be given a copy of the Summary Plan Description (SPD) within 120 days after a plan is adopted or within 90 days after becoming eligible to participate in the plan or receive benefits. Review the SPD to make sure it accurately describes the provisions of your plan. If changes have been made to the plan document (which is likely, given the recent tax law changes) then all participants must receive a notification of these changes within 210 days after the end of the plan year in which the changes were adopted. Generally, all participants must receive a copy of the SPD every five years.

 

Bonding

Generally, plan fiduciaries and others who handle the assets of a plan must be bonded. The bond must be equal to at least 10% of the funds handled by the bonded individual, but cannot be for less than $1,000 and need not be for more than $500,000.

If you are unsure whether your plan currently meets all the requirements of our checklist, or if you would like assistance reviewing your plan, please call us at 866.238.0082.