Best Practices for Managing Participant Data

Best Practices for Managing Participant Data

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Plan sponsors could save a lot of time, expense and stress by implementing a thorough system for managing participant data. Having the appropriate procedures in place can limit potential liability in an audit. Most companies don’t realize the pertinence of maintaining adequate, compliant records until there is a need.

Practicing good recordkeeping is nothing new, as ERISA has declared it a fiduciary responsibility from the beginning. Now, both the Department of Labor (DOL) and the Internal Revenue Service (IRS) are focusing on the requirement of locating missing participants. That makes it even more critical to not wait until an audit to start properly managing your data. Below are a few practical steps to locate missing participants (and beneficiaries). In addition, automatic rollovers can help plan sponsors ensure accurate participant records.

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2018 Year-End Checklist for Plan Sponsors

2018 Year-End Checklist for Plan Sponsors

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As the end of the year approaches, plan sponsors must ensure that they are preparing for proper adherence to regulatory and legislative requirements. ERISA compliance can be a tedious, complicated, and time-consuming process. The following plan sponsor checklist will help cover some of the most important aspects that all sponsors should keep in mind to make the year-end process less challenging.

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Why Auto-Enrollment Matters for Plan Sponsors

Why Auto-Enrollment Matters for Plan Sponsors

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In 2006, Congress passed the Pension Protection Act, which authorized employers to enroll workers in retirement plans automatically. According to the IRS, automatic enrollment is the ability of employers to contribute a certain percentage or amount from an eligible employee’s paycheck into an employee’s retirement account. Employees retain the right to opt out of the program or change the deducted amount. Auto enrollment for defined contribution plans can increase saving rates. It also serves to overcome an employee’s inertia, as many workers find enrolling to be time-consuming and overwhelming. The employer sets the initial level of deduction, helping employees to save more.

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Understanding Fiduciary Roles: 3(21) vs 3(38)

Understanding Fiduciary Roles: 3(21) vs 3(38)

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Due to ERISA’s increased standard of care, the now defunct DOL rule and other potential regulatory replacements, plan sponsors are faced with the heightened importance to understand the fiduciary roles and responsibilities for their retirement plan. Below, we have outlined the ways of becoming a fiduciary, the differences between ERISA 3(21) and 3(38), and which is best depending on your plan and plan committee(s).

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Common Plan Sponsor Misconceptions

Common Plan Sponsor Misconceptions

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Plan sponsors have to manage many moving parts in their retirement plans. Arranging plan options, managing compliance, increasing participation, educating participants and most importantly, adhering to fiduciary obligations can feel like an overwhelming responsibility. Due to the large amount of work in starting and maintaining their retirement plan, sponsors often overlook certain aspects that may expose them to potential liability.  Additionally, some plan sponsors are unaware of the ongoing fiduciary duties which can result in misconceptions about the plan and its participants. These misconceptions can be costly, and sponsors may find themselves in trouble with the IRS or the Department of Labor.

Here are five common misconceptions plan sponsors have – and why they are likely wrong.

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