With the U.S. Department of Labor stepping up its enforcement efforts, plan sponsors need to make sure they are in compliance with every rule and regulation when it comes to their retirement plans.
It isn’t enough to just be prepared. When January rolls around, plan sponsors need to know whether they are eligible for an audit and if they are, they need to submit an independent plan audit with their IRS Form 5500.
It doesn’t even matter how much money has been misdirected or not deposited into participant accounts quickly, Todd said. If even 50 cents is out of line, it will trigger DOL enforcement, which nobody wants, she said.
One problem that both Minnihan and Todd see frequently is human resources professionals who have been in the business for so long that when they change jobs, they don’t even glance at their new company’s retirement plan provisions, but start doing things as they’ve always done them, at their previous companies.
Many plans sponsors don’t understand why auditors, such as those from Moss Adams, spend so much time looking at every aspect of their retirement plan. Many say, “we have few assets so why do you need all of this information?” Todd said.
The reality is the auditors get audited by the DOL as well. “They come in and look at what we are doing as part of the audit,” she said.