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:

  1. Develop annual review procedures for your plan to ensure all required amendments to the plan are executed by the mandated deadline
  2. 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
  1. Maintain oversight of your third party service providers
  2. 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?