at corporate retirement plans

  • Plexus Financial Services has an office in Deer Park.

    Plexus Financial Services has an office in Deer Park.

  • Allison Winge

    Allison Winge

Updated 1/4/2016 1:10 PM

As we welcome the New Year, it's important to review any changes you may want to make to your corporate retirement to get a jump start. With this in mind, here are ten things to consider early in 2016 to keep your retirement plan in good health:

Take Inventory of Your Fiduciary Audit File


When inventorying your fiduciary audit file, take these steps:

• Make sure all of your plan documents and Investment Policy are properly executed.

• Return signed copies to your record keeper or Third Party Administrator (TPA).

• Ensure your audit file includes fund reviews and investment committee minutes along with fee disclosures.

• Check your ERISA bond and Fiduciary Insurance. Your ERISA bond should cover 10 percent of plan assets up to a maximum of $500,000. If your plan holds company stock, ensure you meet additional bonding requirements over and above these.

• Ideally, you should keep a copy of every plan document you have adopted for your plan.

Make a list of procedures, roles

Create administrative procedures and internal controls and be sure to consistently follow them

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Create a list of roles and responsibilities that outlines what each employee and retirement plan partner is accountable for and build controls around tasks. Plans that have internal controls in place tend to have better administration. Ensure these are well documented and audited annually.

Make sure changes to your operating procedures are well documented

There are often operational procedures that are not written into the plan's legal documents but are critical to operational compliance. These procedures provide guidelines and objective nondiscriminatory standards.

Required Participant Notices

Eligible employees must be provided with information about the plan. Some examples of the required notices include Summary Annual Reports, Summary Plan Descriptions and the Summary of Material Modifications.

If your plan is a safe harbor or has automatic enrollment, an annual notice should have been provided to plan participants by December 1.

For participant directed plans, you are required to provide participants with fee disclosure notices. If you have adopted a Qualified Default Investment Arrangement, annual notices must be distributed. The QDIA should be reviewed periodically to ensure it continues to be an appropriate choice for the plan.


Also, pension plans typically have an Annual Funding Notice to deliver. Retain copies of all notices in the plan's fiduciary file.

Discrimination testing and projections

Plan Sponsors may want to get an estimate from your TPA/record-keeper of your company contribution liability for the 2015 plan year. It is also a good time to align your employer contribution goals for 2016. If your business offers a bonus or is considering it, you may want to ensure your 401(k) plan allows for a special bonus election allowing plan participants to defer up to 100 percent of the bonus without impacting the current deferral percentage. If your plan doesn't offer the provision, it will require a plan amendment.

Distribution processing

Get terminated employees with small balances rolled into an IRA or paid out. Participant counts and small balances can affect plan pricing, including record keeping, TPA and audit fees.

Compliance and data gathering preparation

In early 2016, you will be contacted by your TPA/record-keeper for census information. The census data includes date of hire, date of birth, compensation and hours of service (if your plan counts it instead of elapsed time).

You will also be asked if ownership has changed, or whether you have ownership or are affiliated in other companies. It's wise to get a head start on this process so the information is easily accessible.

Establish a retirement plan committee

If you have not already done so, this is a best practice. Conduct periodic plan reviews with your providers that are no less frequent than annual.

Understand plan fees and audit your service providers

Regularly evaluate and benchmark whether all fees are reasonable for the services provided. Schedule time to evaluate whether service providers are providing the services outlined as agreed to.

Develop strategy for the upcoming year

Work with your record keeping provider and plan adviser to set plan goals and education initiatives to improve participant outcomes. Establish success measures that you can monitor and track success from year to year.

Getting off to a solid start in 2016 can ease administration, proactively address plan costs, and drive better participant outcomes. It's much easier to keep your plan healthy than to resuscitate a sick one.

• Allison Winge is executive vice president, practice leader, with Plexus Financial Services LLC with offices in Deer Park. A subsidiary of The Plexus Groupe LLC, Plexus Financial Services is an independent, objective firm dedicated to provide consulting expertise and advisory services to plan sponsors of corporate retirement programs. For more, visit or contact (847) 307-6222.

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