Friday , March 29 2024
Craig Dart
Craig Dart

Who’s Responsibility Is It Anyway?

By Craig Dart

Are you an employer with a retirement plan?  Do you know whose job it is to administer your 401(k) or profit sharing plan?

The Department of Labor states, “A plan must have at least one fiduciary (a person or entity) named in the written plan, or through a process described in the plan, as having control over the plan’s operation.  The named fiduciary can be identified by office or by name. For some plans, it may be an administrative committee or a company’s board of directors.”

While most companies have a third party administrator performing most of the functions of the plan such as preparing participant statements and the annual tax return filing (commonly known as the Form 5500), the ultimate responsibility usually falls on someone designated by the sponsoring employer.  Therefore, it is important that that person fully understand the plan, how it operates, what could go wrong and how to make corrections if necessary as failure to comply with government regulations can be costly.

Here are some tips for administering your plan

  1. Select a qualified CPA who has the expertise to perform an audit in accordance with professional auditing standards. It is okay to keep the same CPA to prepare your corporate tax returns, but have a CPA with benefit plan expertise perform the audit to ensure compliance with the DOL regulations.
  2. Provide adequate training to management and staff who will be administering the plan on behalf of the Company and its employees. Your CPA can provide you with resources and answer many of your questions.  There are also numerous classes and resources offered by the AICPA and DOL for plan administrator.  Ask your CPA for guidance.
  3. Actively monitor and review the plans investments and investment performance with an investment advisor
  4. Use a recordkeeper who has experience in your industry and the type of plan you have
  5. Make sure that the reports you receive match your internal records
  6. Ask for the audit to be performed at your CPA’s office

For more plan tips like these or ideas on how to properly plan for your audit or administer you plan, contact Craig Dart from C Dart CPA at 951-300-9680.

 

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