Many of us start off every new year with the resolution of getting in better shape. For some, that can mean physical shape. For others, it could mean financial, intellectual, emotional, spiritual, etc. Ideally, along with the resolution, is a strategy to arrive at a desired goal.
Have you considered a strategy to get your retirement program in better shape?
There are several expectations that allow the employer to receive favorable tax and employee benefits when they sponsor a retirement program. One of the major expectations is voluntary compliance with the numerous IRS and ERISA requirements. Compliance is not easy… no matter your level of expertise or the amount of effort made – mistakes happen. The key is to have documented processes and procedures in place. This is important because good documentation usually leads to good results. And, under ERISA, a plan fiduciary is not only judged by the outcome of any particular act or decision, but also whether a prudent process was followed.
So, if getting your retirement program into better shape wasn’t a 2016 resolution, you may want to reconsider because the IRS and DOL made it their resolutions in 2016 to pursue better plan compliance.
The IRS has made as one of its 2016 priorities to focus the Employee Plans division’s audit resources on large plans, 403(b)/457(b) plans, and multiemployer plans. The emphasis will be on the plans’ internal controls. The reason for the focus is a historical pattern of non-compliance in these types of plans. Its remaining resources will be applied toward cash balance plans, 401(k) plans, and ESOPs. (For a link to the full list of IRS priorities click here.)
And, the DOL recently released changes to the 2015 Forms 5500/5500-SF. Several new IRS compliance questions were added to the forms. (For a link to the Form 5500 changes, click here.)
We’re here to help
In addition to the tools and services we have in place to help keep plans compliant, our consulting blogs in 2016 will address several common plan design topics, with a focus on plan compliance and plan governance. Our major topics will be:
- Nondiscrimination testing and plan compensation
- Plan designs to overcome testing issues
- Participant outcomes
- Plan operational issues
Expect to see a new blog from us every two weeks.
Unlike the resolutions that many of us make (and quickly break) each new year, the resolution to get your retirement program in better shape shouldn’t be dismissed. There’s just too much at stake. Follow us throughout the year as we provide plan compliance and governance tips and best practices. This is one resolution that we can help you accomplish in 2016.