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Benefit Plan Audit

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Updated June 14, 2021

Allyson Krause CRPP™, Managing Director Retirement Plan Services

Benefit plan audit season is upon us.  The Federal law governing private-sector retirement plans, the Employee Retirement Income Security Act (ERISA), requires that those responsible for managing retirement plans—referred to as fiduciaries—carry out their responsibilities prudently and solely in the interest of the plan’s participants and beneficiaries. Among other duties, fiduciaries have a responsibility to ensure that the services provided to their plan are necessary and that the cost of those services is reasonable.  Now is the time to analyze and re-evaluate all aspects of your current 401(K) plan and provider. Here is a checklist of ten questions to consider:

  1. What investment options are offered under your company’s 401(k) plan?
  2. Do you have all available documentation about the investment choices under your plan and the fees charged to your plan?
  3. What types of investment education are available under your plan?
  4. What arrangement is used to provide services under your plan (i.e., are any or all of the services or investment options provided by a single provider)?
  5. Do you and other participants use most or all of the optional services offered under your 401(k) plan, such as a participant loan program and insurance coverage?
  6. If administrative services are paid separately from investment management fees, are they paid for by the plan, your employer or are they shared?
  7. Are the investment options tracking an established market index or is there a higher level of investment management services being provided?
  8. Do any of the investment options under your plan include sales charges (such as loads or commissions)?
  9. Do any of the investment options under your plan include any fees related to specific investments, such as 12b-1 fees, insurance charges, or surrender fees, and what do they cover?
  10. Does your plan offer any special funds or special classes of stock (generally sold to larger group investors)?

We would love to help you assess your current situation and provide guidance regarding these topics. Contact us to learn more about how we have been helping companies like yours with their 401(K) and retirement plan services. Give us a call at 800-658-9474.

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Allyson Krause CRPP™, Managing Director Retirement Plan Services