Every single thing you need to know to get your company retirement plan up and running
Finding the best retirement plan for your business has everything to do with your goals. The very first step you should take is to identify what you are trying to accomplish with the plan. If you’re unsure of your goals, but just know you need a plan, ask yourself the following questions:
Whether you’re developing a new plan or switching administrators, your TPA should make sure everything is taken care of and the plan is designed to fit your needs. This allows you to focus on running your business.
Your retirement plan TPA should stand shoulder-to-shoulder with you throughout the life of your plan to ensure you properly attend to your fiduciary duties and that you, your business, and your employees continue to receive maximum benefit from your business retirement plan. As part of your qualified retirement plan design, your plan administrator will help you:
At the end of the year, your dedicated administrator needs to take the time necessary to perform a thorough evaluation of your plan’s overall health so you have a clear understanding of your plan’s status. You have enough to worry about—let your TPA help get your retirement plan in shape.
Some 401(k) TPAs may suggest cookie-cutter plans that are easy to establish and administer. Look for an administrator that will provide a comprehensive analysis of available options and are able to identify enhancements and additional benefits over and above these plans in many cases.
The reasons why you’ve decided to set up a retirement plan for your company will determine which plan is best for you and which features you'll want to include. It doesn’t matter if your main goal is to put away money for yourself, reward top-performing employees, or be more competitive in recruiting employees, your retirement plan TPA will help design a plan in line with your intentions.
Many business owners enter the conversation having done some research and have an idea what their plan should look like, but that research is unlikely to include detailed information customized to you and your business. That’s why a good TPA will work with you to create a custom plan designed to meet your goals and build successful outcomes for everyone at your company. You can explore options customized for you and your business needs, with considerations like:
Having flexibility with respect to your plan design is the difference between a retirement plan that works and one that works for you. While your company may already offer a plan to your employees, could it be better or offer more flexibility for what you want the plan to provide?
Wondering what the difference is between a 401(k) and a 403(b)? Confused about Safe Harbor 401(k)? And what is prevailing wage? Comparing retirement plans can be complicated, so we’ve rounded up the need-to-know information to get you started.
we’re here to help when you are ready
Learn more below about the different service providers and the role each plays in keeping the plan a success.
CHOOSE PLAN DESIGN AND DOCUMENTS - design options are listed below, but if you'd rather just have someone walk you through each of these one the phone with you, request contact here for personalized help deciding on these options.
Once you have outlined your goals for what the plan will look like, you can figure out how to have your retirement plan set up to fit your needs. Even prototype plans offer options for employers to draft a semi-custom document:
Get your Free Consultation to see which type of plan would be best for you! Not only will you learn how to set up a 401k, we will walk you through each step.
CHOOSE AN INVESTMENT MANAGEMENT COMPANY
Retirement plan assets are held in a trust. The trust language is part of the plan documents. When you have a retirement plan set up, where you choose to invest those trust assets depends on what’s important to you and the plan design. A variety of investment custodians are available depending on which type of investment works best for your plan:
CHOOSE YOUR RECORD-KEEPER
The record-keeping function will be determined once the investments are in place. The investment custodian, plan administrator, or a third party recordkeeping firm may be engaged to perform this function.
All investments held by the trust will need to be valued at least once per year. Marketable securities like stocks, bonds, and mutual funds are valued by the markets in which they are traded. Fixed assets and collectibles held by trust assets need to be valued by an independent third-party appraiser every year.
The record-keeper will track account balances for the plan and/or the plan participants. Participants must be provided with a statement of their account balance at least once per year. If the accounts are participant-directed, quarterly statements are recommended.
CHOOSE A THIRD PARTY ADMINISTRATION COMPANY - This one is easy, you are already here, and we can help you with every step listed above.
Part of getting a retirement plan set up is administration of the plan, which is the responsibility of the employer who adopted it. Many of these functions are often outsourced to a Third Party Administrator (TPA). The Employer should take care in engaging a TPA that will perform the responsibilities with diligence and care. As the employer, you should make sure to review the TPA service agreement so you understand completely your responsibilities and what the TPA is responsible for.
Among the responsibilities of the administrator are:
Work carefully with your TPA to make sure all functions are performed to your satisfaction and in a timely fashion.
You will be processing distributions and loan requests for participants in the plan. Our role as TPA is to review the vesting and eligibility for distributions to avoid problems, or money being paid inappropriately.
At the end of the year, we’ll ask you for information about your employees and the deposits made to your plan.
As your TPA, we will perform the compliance tests, prepare financial statements, and draft the Form 5500 filing that must be submitted to the Department of Labor each year. Keep reading for the critical due dates for retirement plans.
COMMUNICATIONS – There are a variety of notices to provide to the employees eligible for the plan. In addition to information about the Plan and Enrollment, certain plan features such as Safe Harbor, Automatic Enrollment, and default investments must be provided annually. At Benefit Resources, we provide assistance in preparing and reminding you about notices that are required.
Our industry is full of deadlines.
Some due dates are fixed, meaning that they always happen on a particular date every year. Examples of fixed dates are:
Form 1099R |
January 31 |
report distributions from retirement plans in the prior year |
Form 1096 |
February 28 |
cover page for submitting Forms 1099R |
ROLLING DATES
Most dates relating to due dates for retirement plans are dependent on the Plan Year. The majority of plans are administered on a calendar year, but a good portion is administered on a fiscal year. Very often if the company that sponsors a plan has a fiscal year, then the plan may be run on that same fiscal year. A list of the rolling due dates for a retirement plan is shown below. All dates relate to the end of the plan year.
Compliance corrections (if necessary) |
2 ½ months after end of plan year |
Contributions for deduction purposes |
2 ½ months for corporations, 3 ½ months for others |
Contributions may be extended for |
6-months after initial deadline |
Mandatory contributions |
8 ½ months after end of plan year |
Form 5500 due date |
7 months after end of plan year |
Form 5500 may be extended for |
2 ½ months after initial deadline |
Participant notices |
30-90 days prior to the effective date (Safe Harbor status, Automatic Enrollment materials and/or Qualified Default Investment Arrangement) |
Plan Amendments |
In general amendments must be signed before they are effective |
We encourage all of our clients to have these due dates on their calendar, with a reminder at least 30-days in advance.
Not sure you are getting what you need from your TPA? (An indication is that you are here rather than on the phone with them.) We can look at your latest 5500 and give you insight.
CORRECTIONS
There is a way to fix the problem of failing to meet a deadline as outlined here.
Compliance corrections (if necessary) |
Can be corrected up through the end of the following plan year |
Contributions |
May be made up through the end of the following plan year, but changes to the timing of the contribution will change the timing of the tax deduction |
Form 5500 due date |
You can file under the Delinquent Filer Voluntary Compliance program for a fee of $750 for a small plan, or $1,500 for a plan with over 100 participants. |
Participant notices |
Failure to provide notices timely can be very expensive; up to $100 per day per participant! |
Plan Amendments |
The Employee Plans Compliance Resolution System includes ways to retroactively amend plans and make other corrections that may be needed. These submittals typically require the expertise of an attorney who specializes in ERISA law. |
As your Third Party Administrator, we will work with you to make sure you get us your work on time. Given the way that our industry is wired with due date after due date, we want to make sure that you are in compliance at all times.
We will: