{"id":2382,"date":"2024-03-04T20:38:48","date_gmt":"2024-03-04T20:38:48","guid":{"rendered":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/?p=2382"},"modified":"2024-03-04T20:38:50","modified_gmt":"2024-03-04T20:38:50","slug":"irs-outlines-retirement-plan-sponsors-responsibilities","status":"publish","type":"post","link":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/irs-outlines-retirement-plan-sponsors-responsibilities\/","title":{"rendered":"IRS Outlines Retirement Plan Sponsors\u2019 Responsibilities"},"content":{"rendered":"<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"612\" height=\"408\" src=\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2024\/03\/irs.jpg\" alt=\"Retirement plan sponsors have various regulations to which they must comply\" class=\"wp-image-2383\" srcset=\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2024\/03\/irs.jpg 612w, https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-content\/uploads\/sites\/4\/2024\/03\/irs-300x200.webp 300w\" sizes=\"(max-width: 612px) 100vw, 612px\" \/><\/figure>\n<p class=\"leading\">Retirement plan sponsors have various regulations to which they must comply. While many plan sponsors rely on third party administrators to support them in this area, the responsibility for compliance ultimately rests with them. The following topics have been isolated by the Internal Revenue Service (IRS) and outlined in its \u201cA Plan Sponsor\u2019s Responsibilities.\u201d<\/p>\n<h2 class=\"wp-block-heading\">The Internal Revenue Code<\/h2>\n<p>All plan documents must be written to comply with the requirements in the Internal Revenue Code (IRC). Plans must be administered to follow the IRC\u2019s operational terms. To ensure that a plan is operating in accordance with the IRC, its terms and the law, plan sponsors are advised to revenue their plans annually.<\/p>\n<h2 class=\"wp-block-heading\">Review Options Carefully<\/h2>\n<p>Some plan sponsors opt to purchase pre-approved plans of which some may have an adoption agreement. This agreement, which becomes part of the plan, is a supplement to the basic plan document and lists plan features\/options that sponsors can select. It is important to understand and carefully review the adoption agreement, specifically for such aspects as:<\/p>\n<ul>\n<li>When employees become eligible to participate in the plan;<\/li>\n<li>Types and amounts of allowable plan contributions;<\/li>\n<li>How employer contributions are divided among participants;<\/li>\n<li>When participants become vested; and<\/li>\n<li>When and how benefits are paid.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Understand What the Service Agreement Covers<\/h2>\n<p>As all plans require various administrative tasks to be performed, it is important to understand how these tasks will be performed and by whom. Further, it is important that the person(s) performs plan-related tasks regularly:<\/p>\n<ul>\n<li>Review plan documents to ensure they are in compliance with any law changes and are updated accordingly;<\/li>\n<li>Apply the plan\u2019s terms for participation, contributions, and distributions;<\/li>\n<li>Provide required plan notices to participants in a timely basis;<\/li>\n<li>File required forms and documents with the IRS and\/or Department of Labor (DOL);<\/li>\n<li>Determine if plan testing is required and if it is, perform testing on a timely basis;<\/li>\n<li>Maintain accurate records for participant accounts;<\/li>\n<li>Invest plan funds and review any associated fees;<\/li>\n<li>Understand fiduciary responsibilities; and<\/li>\n<li>Make any necessary corrections when plans fall out of compliance and pay fees associated with this.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Pre-Approved Plans Still Demand a Plan Sponsor\u2019s Due Diligence<\/h2>\n<p>Pre-approved plans, while a convenient way to start a retirement plan, still require plan sponsors to uphold their responsibilities relating to:<\/p>\n<ul>\n<li>Knowing what fees will be charged by the pre-approved plan provider;<\/li>\n<li>Retaining the opinion or advisory letter for the pre-approved plan issued by the IRS;<\/li>\n<li>Signing any plan amendments provided by the pre-approved plan provided promptly;<\/li>\n<li>Providing any pre-approved plan amendments to the plan administrator; and<\/li>\n<li>Keeping your pre-approved plan provider informed as to any changes in the business, employees, or their compensation, as well as amend the plan\u2019s terms if, for instance, changes are made to the matching or contribution formulas.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Keep Plan Service Providers Informed<\/h2>\n<p>Plan sponsors should be diligent in keeping their plan service providers informed as to numerous factors that are related to and\/or may affect the plan. These include:<\/p>\n<ul>\n<li>New hires, re-hires, terminations, and compensation changes;<\/li>\n<li>Accurate payroll compensation amounts for each participant;<\/li>\n<li>Census data for determining plan eligibility and benefit payments;<\/li>\n<li>Data required to accurate identify highly compensated employees;<\/li>\n<li>Plan terms for defining employee contributions, plan payments and loans; and<\/li>\n<li>Plan amendments such as changes to compensation definitions, hardship withdrawal provisions, loan provisions, and contribution or allocation formulas.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Plan Maintenance Requirements<\/h2>\n<p>To properly maintain a plan and remain qualified for tax benefits, plan sponsors should be aware of their responsibilities relating to the review of service providers\u2019 reports (i.e., allocation report for potential contribution errors, distribution report to ensure participants are timely in starting their required minimum distributions and consented to these payments). Additionally, plan maintenance requires that plans where participant loans are allowed must ensure that loans are made in accordance with the plan\u2019s terms, that participants\u2019 account balances are adequate to support the loan, that the loan repayments are timely and that defaulted loans are acted upon swiftly, and where hardship loans are concerned, that documents demonstrating the participant\u2019s need are retained.<\/p>\n<p>Under their maintenance responsibilities, plan sponsors should review their plans\u2019 terms to ensure that they are adhered to, and that an independent review of the plan is conducted.<\/p>\n<h2 class=\"wp-block-heading\">IRS Resources<\/h2>\n<p>The IRS offers many compliance resources to help plan sponsors meet their regulatory responsibilities. These include the Retirement Plan Operations and Maintenance, Have You Had Your Retirement Plan Check-up This Year?, And Fix-It Guides, among other IRS publications. The DOL also offers guidance in this area.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retirement plan sponsors have various regulations to which they must comply. While many plan sponsors rely on third party administrators to support them in this area, the responsibility for compliance ultimately rests with them. The following topics have been isolated by the Internal Revenue Service (IRS) and outlined in its \u201cA Plan Sponsor\u2019s Responsibilities.\u201d The&#8230;  <a class=\"excerpt-read-more\" href=\"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/irs-outlines-retirement-plan-sponsors-responsibilities\/\" title=\"Read IRS Outlines Retirement Plan Sponsors\u2019 Responsibilities\">Read more &raquo;<\/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\/2382"}],"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=2382"}],"version-history":[{"count":2,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/2382\/revisions"}],"predecessor-version":[{"id":2386,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/posts\/2382\/revisions\/2386"}],"wp:attachment":[{"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/media?parent=2382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/categories?post=2382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/wp-json\/wp\/v2\/tags?post=2382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}