The company/organization sponsoring the Retirement Plan is considered the Plan Sponsor. The Plan Sponsor is ultimately responsible for all aspects of the Plan. Plan Sponsors generally secure a team like Leading Retirement Solutions, to assist with the various requirements related to your Plan.
- The Plan Sponsor must ensure the Plan remains in compliance with federal regulations. Compliance responsibilities include:
- Your plan document must be written to comply with all requirements in the Internal Revenue Code.
- Your plan must be administered to follow its terms in operation.
- Review your plan annually to make sure it’s operating according to its terms and the law.
- The Plan Sponsor is also responsible for:
- Making sure that all government reporting deadlines are met.
- Notices are distributed to employees and participants.
- Know your enrollment dates and payroll dates, these dates are especially important if you have employees.
- Filing year-end forms. The Plan sponsor is responsible for filing all Plan Year End information such as employee census and/or summary, and Internal Revenue Service form 5500. Please see ‘Plan Requirements’ for more information about these requirements.
- Implementing your Retirement Plan. Understand how your Retirement Plan operates. Refer to the Adoption Agreement that we have provided to you. Know what your adoption agreement says about:
- When your employees are eligible to participate in the plan;
- Types and amounts of allowable plan contributions;
- How employer contributions are divided among participants;
- When participants are vested; and
- When and how benefits are paid.
- Maintaining your Retirement Plan. Once you’ve established a retirement plan, you assume certain responsibilities in operating the plan. Your duties will vary depending on the type of plan you choose, but in general will include:
- Enroll participants in the plan when they’re eligible.
- Make contributions required by the plan terms.
- Withhold the appropriate amount of salary deferrals, if your plan allows them, and timely deposit the deferrals in employees’ individual accounts.
- Notify participants when certain events occur.
- Perform annual testing to determine if your plan benefits discriminate in favor of highly compensated employees, if required.
- File annual reports with the IRS, DOL and PBGC, if required.
- Make distributions and loans in accordance with the plan terms.
- Amend your plan document as necessary to reflect current laws.
- If errors occur in operating your plan, correct them as soon as possible to keep your plan tax-qualified.
- Develop internal controls to maintain your plan. Formal review procedures can help you find and prevent mistakes in administering your plan. Internal controls should include procedures for:
- Compare salary deferral election forms with the amounts deducted from employees’ wages.
- Verify the types of compensation used for allocations, deferrals and testing.
- Check that plan service providers received accurate compensation and ownership records.
- Monitor annual contribution and compensation limits.
- Verify the validity of rollover contributions to the plan.
- Verify that years of service were accurately determined for eligibility and vesting.
- Verify marital status and spousal consent for plan distributions.
- Ensure participants received required minimum distributions.
Leading Retirement Solutions
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(800) 974-2814 (toll free)
Our mission: to proactively support organizations and lead them toward a secure future.
Article ID: 74, Created: 6/15/2021 at 12:20 PM, Modified: 8/3/2021 at 11:15 AM