The end of a financially challenging year is approaching, and with inflation and the uncertainty about the economy growing, now is an important time for plan sponsors and their advisors to do a top-to-bottom review of their employer sponsored 401(k) retirement plans.

Well-run plans have frequent reviews for many of their individual elements, so why is a full review vital? Taking a holistic approach enables employers and advisors to check the overall health of the plan, determine if it's achieving its goals, and gauge how prepared it is to deal with changes—to government policies, environmental factors like the economy, and internal changes within the company.

Taking the time now to thoroughly vet every element of your, or your client's, 401(k) plan can prevent costly stumbles—both with compliance and budgeting–and refocus your goals for 2023.

Review compliance procedures

Inflation is impacting everyone, including plan sponsors and advisors, who are seeing increases in the costs of running and managing retirement plans. Both should brace for higher general costs of day-to-day operations and also prepare to meet inflation-increased Employment Retirement Income Security Act (ERISA) penalties in 2023. The Employee Benefits Security Administration (EBSA) will likely release the Guidance for the increased penalties in January, but now is the time to take action to prevent and mitigate the potential impact.