Far too many employers look at reviewing their fiduciary file as an annual event. Don't fall into that trap. (Photo: Shutterstock)
It's that time of year for many retirement plan sponsors as they put the finishing touches on Form 5500, the annual employee benefits report required to be filed with the IRS. It's also an ideal time for sponsors to take a deep dive into the retirement plan fiduciary file to improve documentation and avoid any compliance-related squabbles with Uncle Sam.
Many employers underestimate the value in having a comprehensive, well-organized fiduciary file — the 20-30 agreements, contracts and written plans that compose any retirement plan. The effort spent organizing your files will give you more time to find ways to improve the plan. Just think: No more scrambling to find or update plan documents at the last minute when filing your 5500.
Remember that you, as plan sponsor, are responsible for keeping your company's retirement plan in compliance. Here are three best practices to make sure the fiduciary file helps you accomplish that goal:
1. Always have a fiduciary file checklist
Every plan sponsor needs to have a comprehensive checklist of all documents — and where those documents are located — in the fiduciary file. Yes, this should be obvious, but you'd be surprised at how many plan sponsors have an incomplete list and/or can't easily locate required documents.
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