Please review the Year-End Compliance Checklist on our website.
This short checklist is intended to identify any actions that might be required either before December 31, 2015 or shortly thereafter.
Please note we are NOT requesting that this checklist be returned to our office. HOWEVER, if you identify any action items, please call us: 860.284.6880
If your company is giving holiday or other bonuses this year, your 401(k) plan may allow a special bonus deferral election. That would mean your plan participants could defer up to 100% of their bonuses without impacting their current deferral election.
Here are the required forms:
Of course, call your plan consultant at PASI with any questions!
The issue of timely 401(k)/403(b) deposits continues to be of the highest priority to the US Department of Labor. In accordance with final regulations regarding deposit deadlines, Plans with less than 100 participants are required to deposit contributions within 7 business days from the paycheck date.
Plans with more than 100 participants have generally been held to a higher standard – we therefore recommend that these larger plans deposit contributions within in a few business days of the pay-check date.
Connecticut and many other states have laws requiring employers to protect personal information, such as Social Security Numbers and Dates of Birth. In order to send and receive this information to/from our clients, we have subscribed to ShareFile (a Citrix subsidiary). They are a state of the art provider of encryption software to share sensitive data with our clients.
Please remember to use this tool when returning sensitive information to our office; a ShareFile link is at the bottom of each PASI Consultant’s email signature. We’re happy to assist!
Every year, retirement plan sponsors must review whether their plan’s fidelity bond is adequate. Here is a summary of the fidelity bond rules required by the Department of Labor (DOL).
To protect employee benefit plans from fraud or dishonesty on the part of those handling retirement plan funds, ERISA generally requires that every fiduciary of the plan, and everyone who handles the plan’s funds, must be bonded. This includes all “plan officials” who have:
- Physical contact with cash, checks or other Plan property.
- Power to transfer or negotiate Plan property for a price.
- Power to disburse funds, sign checks or produce negotiable instruments from the Plan assets.
- Decision making authority over any individual described above.
The fidelity bond must be at no less than 10% of plan assets. There’s a minimum of $1,000 and a maximum of $500,000.
Consequences of Not Maintaining the Fidelity Bond
Serious consequences result from not purchasing and maintaining a sufficient ERISA fidelity bond.
- It can be a red flag to the DOL that they need to take a closer look at the plan.
- A serious underwriting risk may arise if non-qualified assets aren’t properly listed on the bond application because non-qualifying assets carry a higher level of risk for loss. If they are not listed on the bond, the underwriter would have cause to deny coverage if there was a loss due to misuse or misappropriation by a plan fiduciary. Under those circumstances, the loss may be denied and the trustees could be liable for the losses to the plan.
For a check on your plan’s Fidelity Bond status, get in touch with PASI or your insurance agent.
All “pre-approved” qualified plan documents (such as the one distributed by PASI) are required to be restated in their entirety no later than April 30, 2016. The primary purpose of this “PPA Restatement” is to update the plan documents for all regulatory changes in the past several years.
During the period from 2008 through 2010, all qualified plans utilizing a “pre-approved” plan document (such as the one distributed by PASI) were required to restate that plan in its entirety. Plan sponsors must adopt these new “PPA Restatements” by April 30, 2016.
Many of you already received the new documents, which we would ask you to please execute per the instructions. For those who have not yet received them, they will be arriving before the April deadline. Please call PASI with any questions about the PPA Restatement process, or to discuss any changes you could, or should be, making to your plan now.