In recent years, regulators have intensified their focus on and scrutiny over retirement plan controls. Given this, it’s critical to ensure that the proper procedures and controls are in place for your qualified plan.
Operational compliance controls are a particular area of focus for the regulators. Specifically, you should make sure that your plan operations are consistent not only with your plan document, but also that they meet the terms and conditions of all applicable laws.
Failure to do so could expose your plan to penalties and high costs to correct errors exposed during a plan audit. In a worst-case scenario, it could even lead to the loss of qualified plan status.
Evaluating Your Controls
One way to ensure that your plan’s operational compliance controls are adequate is to evaluate them at each stage of a worker’s employment lifecycle. These stages typically include the following:
Monitoring Plan Information
Your plan’s operational controls should ensure that procedures are in place to monitor compliance with laws and regulations, and for retention of a wide range of plan information. This typically includes participant demographic data, benefit determinations, timely remittance of contributions, testing results, consent forms, and applicable government filings.
Please contact us if you have more questions about operational compliance controls.