By:Randy Brunson, CEO of Centurion Advisory Group
Employer-sponsored retirement plans, such as 401(k) plans, can be complex plans to manage and administer. If you have oversight or decision-making responsibility for your company’s plan, what actions can you take this summer, to enhance employee and participant preparedness, to reduce your team’s workload, and to assure that you are making every effort to stay in compliance?
Following are seven tips to enhance plan quality and effectiveness.
- Consider adding a financial wellness curriculum to your Employee Assistance Program.
- Have your TPA or financial institution run a loan report, and compare it to plan guidelines, for the maximum number of loans allowed, per participant. More loans than is allowed is a common finding in DoL audits.
- Check with your insurance company, to assure that the plan has a fidelity bond, equal to at least 10% of plan assets, up to the maximum required bond amount of $500,000.
- Confirm that your plan has a Qualified Default Investment Alternative, or QDIA. This is the default investment option for those participants who want to make no investment choices. If your plan doesn’t, convene the decision-makers, and add one.
- If your plan is a calendar year plan, remember that July 31st is the filing deadline for Form 5500, unless you file an extension.
- Complete a benchmarking of your plan. Have a plan diagnostic completed which evaluates plan design, competitiveness with plans of like size and within your industry, and benchmarks fund costs and plan operating costs. Most lawsuits against plan fiduciaries claim excessive fees and costs.
- If you haven’t done so already, establish a committee of employees who have responsibility for oversight of the plan. Convene on a regular basis, such as yearly or quarterly, to review plan results. Document these meetings, and the decisions which come from them, in writing.
Randy Brunson is a shareholder of Centurion Advisory Group, a retirement plan consulting firm with offices in Duluth, Georgia. Centurion Advisory Group offers a suite of services to retirement plan sponsors built around RFP design and vendor selection, plan design and administration, fiduciary care, participant education and financial wellness, and investment array, selection and cost. Randy may be reached at [email protected], and 770-817-0525.