You Don’t Know What You Don’t Know

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The first step to becoming the best 401(k) administrator, committee member or concerned party that you can be, is to understand what you have. To understand what you have, you must get organized. In fact, you are anything like me, you cannot get started on a project until everything is order (I had to sweep my floor before I could start writing this blog post this morning) which is why when working with our current clients or prospective clients, the first thing that we do is take inventory of the documents and records that are pertinent to the 401(k) plan.

Before going any further you may be asking, “Why is keeping up with my plan documents a big deal?” First and foremost, because the Department of Labor (DOL) says so.   It is required that all Retirement Plan Documents, i.e. the Basic Plan Document, Adoption Agreement, any Amendments and Summary Plan Descriptions (SPD), must be stored for the life of the plan and for at least six years after the plan terminates. It is also important that the documents that you maintain on file are fully executed with all required signatures and dates. The second category of documents that must be maintained by you, the plan sponsor, are the Annual Filings which include annual compliance testing results, form 5500, audits (if applicable), Summary Annual Reports (SAR), and all supporting documents for contributions and distributions.   This type of plan record should be maintained for at least six years.

The other reason that is paramount that you are easily able to access your plan documents, and I would argue the most important reason, is that the Adoption Agreement and subsequent Summary Plan Description serve as the instruction manual for your plan. The rules on everything from eligibility requirements to distribution options and employee contributions to employer contributions are contained with the Adoption Agreement and SPD. Without a working knowledge of these documents, it is nearly impossible to properly administer your 401(k) Plan.

Which brings us back to getting organized. We recommend to our clients maintaining a “fiduciary file” where all important plan related documents are easily accessible. You may be gather your plan documents from your third party administrator (TPA) and/or recordkeeper’s website; however, keep in mind that is ultimately the responsibility of the plan sponsor to have the documents and not that of your providers.

Need Direction in organizing your plan documents?

Give me a call at 205-970-9088, email jamie@grinkmeyerleonard.com.

Jamie Kertis, AIF®, QKAjamie kertis headshot
Retirement Plan Specialist
Grinkmeyer Leonard Financial
1950 Stonegate Drive / Suite 275 /Birmingham, AL 35242
Office: 205.970.9088 / Toll-Free: 866.695.5162
www.grinkmeyerleonard.com

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IRS: Skip Optional Compliance Questions on the 5500, 5500-SF for 2015

IRS: Skip Optional Compliance Questions on the 5500, 5500-SF for 2015

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For 2015, plan sponsors should skip the compliance questions that were just added to the Forms 5500 and 5500-SF, and to Schedules H, I and R for the 2015 plan year. Revised versions of the 2015 instructions for both forms contain the new information regarding the optional questions.

The Department of Labor (DOL) announced this change in a Feb. 16 message to software developers for EFAST-2, the electronic system by which Forms 5500 are submitted. While the DOL has not yet posted these revised versions on the website of the DOL’s Employee Benefits Security Administration (EBSA), the agency says that it plans to do so.

The revised instructions read as follows:

Form 5500

IRS Compliance Questions. New Lines 4o, 4p 6c, and 6d were added to Schedules H and I. The IRS has decided not to require plan sponsors to complete these questions for the 2015 plan year and plan sponsors should skip these questions when completing the form.

New Part VII (IRS Compliance Questions) was added to Schedule R for purposes of satisfying the reporting requirements of section 6058 of the Code. The IRS has decided not to require plan sponsors to complete these questions for the 2015 plan year and plan sponsors should skip these questions when completing the form.

Form 5500-SF

IRS Compliance Questions. New Lines 10j, 14c, 14d, and new Part IX (IRS Compliance Questions) were added to this Form for purposes of satisfying the reporting requirements of section 6058 of the Code. The IRS has decided not to require plan sponsors to complete this question for the 2015 plan year and plan sponsors should skip this question when completing the form.

The IRS added questions to the Form 5500 and its schedules relating solely to IRS compliance issues because the IRS now requires that certain filers submit the Form 5500 Series electronically. It had said that answering the IRS compliance questions it added to the form was optional for the 2015 plan year.

Jamie Kertis, AIF®, QKAjamie kertis headshot
Retirement Plan Specialist
Grinkmeyer Leonard Financial
1950 Stonegate Drive / Suite 275 /Birmingham, AL 35242
Office: 205.970.9088 / Toll-Free: 866.695.5162
www.grinkmeyerleonard.com

Contact Jamie

Follow Jamie on LinkedIn

Follow Jamie’s Blog