Six Common Retirement Plan Errors to Avoid Before Federal Review

ARTICLE | August 30, 2024

Authored by Vasquez + Company

Proactively auditing your company’s retirement plan can help you identify and address potential issues before federal agencies do. The article "Audit Your Retirement Plan Before the Feds Do" outlines six common operational faults that the IRS and the Department of Labor frequently find. By understanding and correcting these issues, companies can safeguard their retirement savings and ensure compliance.

Key Points

• Late Deposits: Ensuring deferrals are deposited promptly after the pay date to avoid penalties.
• ERISA Violations: Compliance with Section 404(c) of ERISA to properly transfer investment responsibilities to participants.
• Employee Classification: Correct classification of workers to prevent tax liabilities and penalties.
• PEO Arrangements: Obligations for retirement plan contributions when using a Professional Employer Organization (PEO).
• Correction Methods: Properly correcting compliance issues without needing advance IRS approval.
• Default Accounts: Ensuring fiduciaries prudently manage non-directed participants' accounts.

Reviewing your retirement plan for these common issues can help protect your company and its employees.

For more information, read the full article here.

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