Plan Sponsor Quick Tips: Setting Up Plan Records!

Each Monday 401kBasics posts a new tip as a part of our series “Plan Sponsor Quick Tips”. This series is designed to assist plan sponsors in filling their fiduciary role and running their retirement plan efficiently. Your feedback or suggestions on future articles is welcome.

Setting up plan records is an important aspect of any fiduciary’s role. Keeping information related to a 401k plan in an organized manner has proven to be beneficial, especially over a clutter of records. A service provider will suggest ways in which a fiduciary should maintain their records, but ultimately the responsibility falls on the plan sponsor. Regardless of whether records are kept electronically or through the use of hard copies, below are some ways in which a fiduciary can maintain the records to fulfill their role:

  • Plan Documents Folder – Each 401k plan has documents that indicate plan provisions. The documents to go in this folder include, but are not limited to, the adoption agreement form, summary plan description, basic plan and trust documents along with all other legal documents.
  • Non-Discrimination Test Folder – After each plan year-end, 401k plans go through non-discrimination testing and are provided with the results by their service providers. These results should be kept in this folder, as they can be useful during plan audits or in making business decisions.
  • Plan Administration Forms Folder – The most frequently used forms for the plan can be placed in this folder. Some of these forms may include loan applications, hardship forms, distribution forms, beneficiary designation forms, etc.

The 3 folders mentioned above are not mandatory of course, but should give a fiduciary an idea of how to keep their plan records. Some fiduciaries also find it useful to keep an “Incomplete folder” for pending items, but this varies depending on how the records are kept. As always, when in doubt, consult with your service provider for guidance.

This site is for entertainment purposes only. 401kBasics and it’s authors are not financial advisors and no information found on this site should be construed as financial advice.

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