Marcia Wagner Q2 By: Marcia WagnerEsq.

“What would be your checklist or questionnaire that plan sponsors should review that can help us develop good practices and avoid unnecessary liability in our stewardship of retirement plans for our employees?”

1. Tax Qualified Plans
a. Has the plan document been amended for all recent tax and ERISA law changes?  When must your plan be filed for a favorable determination letter under the IRS’ cycle requirements? 
b. Has the plan received a favorable determination letter and/or does the employer have a copy of the opinion or a notification letter in the case of prototype plans?
c. Does the summary plan description accurately reflect the terms of the plan?
d. Has the plan maintained and timely distributed required ERISA participant disclosures such as summary plan descriptions, QDIA notice, 404c notice, blackout notices, safe harbor notices, and summary annual reports?
e. If there are more than 100 employees participating in the plan, does the Form 5500 contain the required audited financial statements?
f. Are employer contributions made timely and in accordance with the terms of the plan, and are employee elective deferral contributions (e.g. 401(k) and 403(b) contributions) made as soon as administratively practicable as required by law?
g. Are all nondiscrimination tests accurately performed, including controlled group testing?
h. How is the investment asset mix determined, modified, monitored and re-balanced?  Who is rendering appropriate investment advice?  Is this entity a fiduciary?  Has it acknowledged its fiduciary status in writing?
i. Does the plan have an  investment policy statement?  Is the plan complying with the investment policy statement?
j. What are all the direct and indirect fees being paid from plan assets, including, but not limited to, revenue sharing?  Has a reasonableness analysis been undertaken to determine if the plan is getting good value for the services it is paying for? 
k. When was the last time an RFP was done vis-à-vis plan administration, investment, accounting, and recordkeeping?
l. Are the plan and all fiduciaries appropriately bonded?  Do the fiduciaries also have liability insurance?  Does the plan sponsor indemnify its fiduciary-employees and Board Members?  Is the surety bond, as required by ERISA, in place and sufficient?
m. Are you aware of and in compliance with all of the new fee disclosure requirements (under ERISA Section 408(b)(2) and 404a-5) that became effective in 2012?

2.  Welfare Benefit Plans
a. Do you have an ERISA-compliant welfare benefit or wrap plan document?
b. Do you have an ERISA-compliant summary plan description?
c. To the extent that the plans are self-insured, are they reduced to writing?
d. Has consideration been given to the Medicare Part D requirements regarding required notification for prescription drugs and potential federal subsidies?
e. To the extent that there are more than 100 eligible employees participating in the plan, have Forms 5500 been filed annually and timely?
f. If you maintain a 125, flexible spending account, dependent care assistance or other cafeteria plan, is it reduced to writing?  When was it last updated?
g. When were your COBRA notices last updated?  Are such notices distributed timely and in compliance with the law?
h. Are your health plan documents and open enrollment forms updated to comply with the Health Care Reform rules?

3.  Employee Plan Issues in General
a. Do you have an employee handbook?  When was it last updated?
b. Are your leave of absence policies reduced to writing and distributed (e.g.,  maternity/paternity, military leave, and other leaves of absence)?
c. What policies and procedures do you have in place with respect to same-sex spouses?  Do you understand and are you complying with the tax ramifications thereof?

Marcia S. Wagner

Marcia Wagner is a specialist in pension and employee benefits law, and is the principal of The Wagner Law Group. The Wagner Law Group is one of the nation’s largest boutique law firms, specializing in ERISA, employee benefits, and executive compensation. Wagner founded the group over 19 years ago. ...

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