![\"Man](\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2022\/05\/Executive.jpg\")
<\/figure>\n<\/div>\n- \n
- Having a deficient process \u2013 The Department of Labor (DOL) expects plan fiduciaries and administrators to adhere to a sound process in the management of their members\u2019 retirement plans. This process should incorporate a detailed Investment Policy Statement (IPS), which is up to date, adhered to and monitored on an ongoing basis. Too often, an IPS becomes outdated or there is a failure to comply with its terms. For example, if the IPS indicates when a failing investment fund should be replaced, it is incumbent on the plan fiduciaries to adhere to that timetable.<\/li>\n
- Not maintaining plan documentation \u2013 Federal regulations require plan sponsors to maintain all essential information for ERISA compliance and to provide information such as a Summary Plan Description (SPD) to plan participants. Failure to do so can result in expensive fines and could result in criminal penalties, in certain situations.<\/li>\n
- Not benchmarking plan fees \u2013 There are many fees associated with a retirement plan, ranging from administrative and investment fees to revenue sharing and consulting fees. The amount of fees has become so excessive that that the DOL included new guidelines covering this area in its updated Enforcement of Investment Advice Rule of 2022<\/em>. Among its stipulations for plan sponsors\u2019 fiduciary oversight are that they understand how and by whom investment advisors are being paid and whether the fees could potentially represent a conflict of interest and do not support the Rule\u2019s main intent of serving the best interest of the plan members.<\/li>\n
- Failing to implement a plan\u2019s automatic enrollment provision \u2013 It is important that plan sponsors and their internal departments (e.g., human resources, finance, etc.) understand the importance of notifying employees when they are eligible for enrollment in their retirement plan based on the plan eligibility rules.<\/li>\n
- Not making timely deposits for an employee\u2019s deferral money in a defined contribution plan – Regulations generally require plan sponsors to transfer elective deferrals to the plan at the earliest date that the plan sponsor can segregate the deferral from its general assets.<\/li>\n
- Failing to keep track of loans and hardship repayments \u2013 Many retirement plans enable participants to take out loans and\/or receive hardship withdrawals from their accounts. It is important to follow the plan\u2019s specific terms regarding these withdrawals and to be vigilant in tracking repayment schedules and any interest associated with loans.<\/li>\n<\/ol>\n
By understanding these common mistakes, plan sponsors can avoid the consequences of a DOL audit and the potential penalties that may result from noncompliance with federal regulations of government retirement plans. Many plan sponsors rely on experienced third party administrators to assist them in avoiding mistakes and maintaining compliance.<\/p>\n","protected":false},"excerpt":{"rendered":"
Given the complexities of today\u2019s employee benefits and the related regulations, it is understandable why many plan sponsors fall prey to several common mistakes. Knowing what they are and how to avoid these errors and related penalties should be a top priority for all plan fiduciaries and administrators. Having a deficient process \u2013 The Department… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/2057"}],"collection":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/comments?post=2057"}],"version-history":[{"count":2,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/2057\/revisions"}],"predecessor-version":[{"id":2102,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/2057\/revisions\/2102"}],"wp:attachment":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/media?parent=2057"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/categories?post=2057"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/tags?post=2057"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}