Once again, ‘tis the season—to be really busy. But if you are a plan sponsor, then there’s one more thing you need to work into your schedule around the holiday parties, the inter-office gift exchanges, and all the other activities that are crowding our calendars at this “most wonderful time of the year”: You need to do a year-end check on your company retirement plan. This is a good time to make sure that everything is in tip-top shape as you and your team members head into the season that always follows this one: tax-reporting season.

There are a few items you can mark off the list pretty quickly and others that might take a little more time and effort, but all are important. And if this is your first time to be looking at these things, this is the perfect chance to build them into your routine so that they don’t take up as much time next year.

  1. Send required information. If you haven’t already, you should send required notifications to all participants, including fee disclosures, benefit statements, and the summary annual report. Also, if you offer a safe-harbor plan, you need to send safe-harbor notices in early December, as well as qualified default investment alternative (QDIA) notices and automatic enrollment notifications. Your plan provider may handle some or all of these tasks for you, but now is the time to make sure that this requirement is managed for the year.
  2. Remind your employees of their benefits. Speaking of notifying your employees, this is also the perfect time to send out a personalized communication to plan participants, reminding them of the good things the plan is doing for them. After all, one of the principal benefits to you as an employer for offering a quality 401(K) or other employer-sponsored plan is the ability to compete for and retain the talent you need to make your business more successful. Why not send a personalized note to all your employees—those who are participating and even those who aren’t—that emphasizes the importance of saving for retirement, the priority you place on it as a business owner, and the convenience of having a payroll-deducted plan available at the workplace. It’s just one more way to remind your employees how important they are to the enterprise and how important their welfare is to you.
  3. Audit employee information. Do you need to update addresses or contact information? Is everyone’s plan status up to date? What about beneficiary changes? Now is a great time to make sure your records are as accurate as possible.
  4. Ensure required deposits are made by the deadline. Timely deposits of plan contributions are one of your key fiduciary duties as a plan sponsor. Not only that, but late deposits can trigger an audit or even additional taxes. Work with your payroll department to make sure that employee contributions are deposited within the Department of Labor’s seven-day safe-harbor rule (for plans with fewer than 100 employees).
  5. Keep well-organized records. Under ERISA, you’re required to maintain records for six years. Make sure your summary plan descriptions, participant notices, documentation of dates and method of delivery for notices, participant elections, payroll records, employment history, and other required documentation are organized and available for reference and inspection.
  6. Review plan fees for competitiveness. Another fiduciary duty you have as a plan sponsor is making sure your plan fees are in line with comparable plans for your company’s size, industry group, and other benchmarks. The number-one complaint in lawsuits against plan sponsors is excessive fees—and after all, the money you pay in fees is money that’s not accumulating for retirement. Don’t let this happen to you; keep an eye on those fees. And by the way, surveys show that significant numbers of employees don’t understand the fee information provided with their plan. Transparency and good communication are important keys to better participation and higher levels of participant satisfaction.

There are other matters you may want to review at year-end, but these are some important points to cover that can help your plan be more efficient for you and your employees.

At Savant Wealth Management, our goal is to deliver the expertise and experience to help provide valuable guidance as you design and implement a company-sponsored retirement plan that is right for your business. Our team can help relieve you of a significant part of the fiduciary burden you carry as a plan sponsor, and we can also offer boots-on-the-ground assistance to help your plan remain compliant, your reporting stay current, and your 401(k) run smoothly, year after year.

To learn more about our retirement plan service options, visit our website to read our recent article, “Choosing a Plan Provider: Some Key Questions.”

Author Patricia L. Hutchinson Director of Retirement Plan Services

Patty has been involved in the financial services industry since 2006. She earned a bachelor of science degree in marketing and management from Northern State University in Aberdeen, SD, and an MBA from Colorado Technical University, Sioux Falls, SD.

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