Our April 1, 2014 blog focused on the news that the IRS is taking a closer look at the Internal Controls of 401(k) plans when a plan is selected for audit. A recent article from Employee Benefit News provides some tips for establishing strong internal controls for your 401(k) Plan:
- Develop annual review procedures for your plan to ensure all required amendments to the plan are executed by the mandated deadline
- Review your plan document to ensure the plan is operating under the terms of the document.
- Common errors include:
- Using an incorrect definition of compensation
- Omitting eligible employees
- Allowing loans and distributions that don’t fall within the perimeters set forth by the plan document
- Maintain oversight of your third party service providers
- Create a manual that outlines all the procedures for reviewing and approving transactions to meet the requirements set forth in the plan document
Does your plan have a manual outlining the procedures necessary to keep the plan in compliance with the plan document and all government regulations?