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.
With retirement plan you are constantly faced with change. In many cases, it can either be triggered by the IRS or by the plan sponsor. Changes triggered by the IRS are usually mandatory but not all of them have to be adopted by a plan, however, those changes triggered by a plan sponsor are by choice. Below are some considerations that fiduciaries administering retirement plans have to be aware of:
- Regulatory Changes – Fiduciaries need to determine if their plans are in compliance by reviewing IRS published guidance and the Cumulative List and keeping up with regulations from the DOL.
- Amendments – In retirement plans often times a goal is high participation rates. Accordingly, plan sponsors may elect to amend their plan to add in features that will help achieve this goal. Some of these features include automatic enrollment and designated Roth accounts.
As you can see, change is a fixture with benefit plans and grasping this concept will help you to achieve a smoothly run plan. As a fiduciary, it is a good practice to educate yourself on plan changes and to consult with your service provider for further clarification.
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